6 Risks That Increase Life Insurance Rates

When shopping for life insurance, there are a number of factors your prospective insurer will consider when determining your acceptability as an insurance risk and, if eligible for insurance with their company, the premium they'll charge. These life insurance rates will be determined using general factors such as age, gender and your health profile, and will also take into consideration any types of high risk behaviors you may demonstrate.

Bear in mind -- not every life insurance company looks at risk the same way. An example of this may be the pursuit of scuba diving. Some insurers may consider scuba diving a high-risk hobby and, as a result, increase the life insurance rates of policyholders who regularly scuba dive. Other insurers may not consider this a high-risk past-time, but may penalize you with higher life insurance rates if you like to race at the local drag strip on weekends. If you're a professional race car driver, you may find that some insurance companies will actually decline from insuring you altogether, while others may sell you insurance with a higher premium, sometimes much higher, than someone they consider to be a “normal” risk.

Risk vs. Reward

To life insurance companies, it's all about risk versus reward. They have untold actuarial data that tells them what their chances are when insuring a certain individual. They're in business to make a profit, which means they must be right more times than they're wrong when issuing someone a life insurance policy.

They're weighing the risk of you living or dying against the amount of premium you and others pay to secure your coverage. Following are some of the risk factors many insurers consider above average and that will likely cause your insurance premiums to increase compared to a more normal-risk individual. Consult your life insurance agent for information on specific companies.

1. Current health problems, including high blood pressure, as well as past history of health issues may both result in higher premium rates.
2. Overweight or obese individuals, based on weight to height ratios, are generally considered higher risks and will typically pay more for insurance.
3. If you have what's considered a risky job (see table here), this will be reflected in your life insurance rates.
4. Family health history such as heart disease or cancer will likely make you a high insurance risk.
5. & 6. Smoking or heavy drinking will both play against you when buying insurance.