What are the factors that can affect your life insurance?

Wrapping your head around life insurance premiums and how they apply to you is an important step to making the most informed decision about your insurance. To help get you on your way, let’s take a closer look at some of the key variables that can affect life insurance costs, as well as provide some helpful tips on how to overcome any complexities.

Impact of age on life insurance premiums

One big factor that can influence your life insurance premium and cover is your age. This is because as you age and experience health issues, the likelihood increases that your insurer may apply a loading or special exclusion to your policy, or you may even find that some insurers will decline to offer you cover.

It’s also important to remember that each year your policy renews, life insurance providers may increase the cost of your premium based on your age and increased risk, particularly if the policy has a stepped premium.

Health and its role in insurance costs

Your health can play one of the biggest roles in determining how much you pay for life insurance. Insurers will assess your overall health, whether you have any pre-existing conditions, as well as your lifestyle habits. Depending on your provider, this will either be done through a simple health and lifestyle questionnaire, or through blood and medical tests.

Australians who have a clean bill of health typically see lower premiums due to less risk to the insurer of a claim occurring. Some of the more common health factors that may contribute to a higher life insurance premium are things like family health history, diabetes, high cholesterol or sitting within a higher BMI. Here are some things you can start doing today to help positively impact your health:

  • Incorporate regular physical activity into your weekly routine to improve your overall health and have an active lifestyle.
  • Eat a nutritious, well-balanced diet – getting into a healthy weight range is a great way to lower your health risks. Regular check-ups with your GP can help identify and take care of any health issues early.
  • Quit smoking and lower your alcohol intake.

Influence of lifestyle choices

Certain lifestyle choices can have a significant impact on life insurance premiums. Smoking, for example, is a high-risk behaviour that will likely mean you pay higher premiums than non-smokers. Engaging in risky activities or having a dangerous job may also mean increased costs. Here are some of the lifestyle choices that can contribute to premium rating factors:

  • Smoking: Any type of tobacco use is considered a big risk factor for insurers. Depending on your provider, E-cigarettes and vaping are also included in the definition of smoking.
  • Excessive alcohol consumption: Heavy drinking or a history of alcohol-related issues may impact your premiums.
  • High-risk activities: You’re likely to have higher premiums if you take part in high-risk activities like extreme sports such as caving or if you have what is defined as a dangerous job.
  • Unhealthy diet: Poor diet choices and any resulting weight issues or obesity may affect your insurance costs.

Other variables and their influence

There are several other things that can – and often do – impact life insurance premiums. These include the type and amount of cover you need, the term of the policy, whether you want to add on any extra benefits, and more. For example, if you were to include optional covers such as Serious Illness Cover or Total and Permanent Disability Cover, your premium would see an increase to cover the cost of these additional extras.

Choosing the right amount of cover to meet your needs while avoiding over-insurance is another important consideration. You’ll also want to pick a policy term that fits in with your budget and plans for the future.

The most important thing you can do before deciding on life insurance is to understand the policy by reading the Product Disclosure Statement. Then when you’re ready to find the policy for your lifestyle you can start comparing a range of life insurance policies with Choosi either online or by calling 1300 363 526.