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Important Factors that Affect Your Insurance Cost and Coverage

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Sacramento insuranceWhen your near and dear ones are dependent on you, buying life insurance becomes an essential thing. It’s crucial to think about your death though the thought is not very pleasant. Today anyone can die of a disease, an accident or even no apparent reason. In that case, you need to think ahead and make their future safe from undesired incidences. But buying life insurance is not enough. You should also consider your overall lifestyle and personality, and the changes that can happen in your life in the future, and check how they will influence the cost and cover of your life insurance.

Does Your Income Affect Your Life Insurance Cost?

If you have a high-paying job, you may naturally worry that life insurance providers may want to take advantage of your high income by charging you higher premiums. And if your job is not very high-paying, you may wonder whether you can get reduced premiums. All in all, does your income affect your life insurance cost?

The answer to this question is no. Life insurance companies don’t consider how much money you make per month while determining your premiums.

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Factors that Affect the Cost of Your Life Insurance

Although your income doesn’t have any impact on your life insurance cost, there are several other factors which do that. Although all of them are not under your control, many of them are. Thus, with the factors that you can control, you can have a significant saving on your monthly premiums.

Your Age

The first and foremost factor life insurance companies consider while determining your premium is your age. It’s because you are highly likely to keep paying premiums for years before they have to pay out your coverage if you are young. Also most people are in their best health in their young age and some insurance policies, e.g. term coverage, will end before your death.

On the other hand, the more is your age, the higher your premiums will be. Older people are more likely to be affected by health conditions that could possibly cause their death. It’s natural that as people age, they go nearer to the end of their life. Thus, the chances become higher for the life insurance company that they will have to pay out the coverage to your family. Therefore, they charge a higher rate to people who buy policies from them at an older age, so the company can incur minimum loss.

However, age is not a factor that you can control; but it’s certainly under your control when to buy life insurance. Thus if you buy it at a young age, you can save a significant amount.

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Your Gender

After your age, your gender is the next most important factor that insurance companies consider while calculating your premiums. According to statistics, women live five years longer than men. This clears the fact that they will pay premiums for longer than men. Therefore, women are charged lower life insurance premiums than men. Of course, this is a factor about which you can do nothing.

Your Lifestyle

You will have to pay more for your life insurance if you have a risky lifestyle, such as driving race cars or jumping from airplanes, because the risk for accidents is far higher for you than someone who has reading as a pastime.

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Your Health

You will most probably have to go through a medical examination before you can receive quotes from a life insurance company. During this medical exam, your weight, height, cholesterol, blood pressure and many other metrics will be assessed as they play a key role in your overall health. If the results of your medical exam show that you have a serious health condition, such as high blood pressure, you can end up paying higher premiums.


Another factor hugely affecting your life insurance cost is whether you smoke or not. Smoking increases your risk of developing serious health conditions, such as cancer and emphysema, that can significantly reduce your life span. Since there are high chances that you will die early if you smoke, insurance companies consider smoking as a major red flag. Actually, smokers may actually have to pay twice as the amount than non-smokers pay for the same amount and type of coverage.

Smoking is certainly a factor that you can control. If you are a smoker, quit the habit and you can save on your life insurance (besides saving on smoking).

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Factors that can Affect Your Coverage

While it’s important to check what you’ll be paying for your life insurance, it’s also important to check whether your loved ones will get adequate coverage. Major changes in your life can affect your coverage. Let’s see what they are.

Marriage or Divorce

While getting married, you both should have life insurance to protect each other. If you already have them, you should update the beneficiary information. Another event to consider life insurance needs is divorce. It should be checked whether you’d get coverage if your ex-spouse dies and s/he is the major provider for you and your children. Also, while planning for a divorce, you may want to remove your ex-spouse as a beneficiary.

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Purchasing a Home

Purchasing a home not only brings homeowner’s insurance, but also may need you to buy more life insurance to enable your spouse pay the mortgage if you die.

Having Children

Giving birth to or adopting a child is also a major life change during which you should reconsider if you have enough life insurance, so as to bear the cost of the child’s care and education in the event of the death of one or both of the parents.

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Change of Job

With the progress of career and increase of income, your life insurance should increase too. You should make sure your policy will meet the financial needs of your family for many years if you die. You may get group term insurance from your employer; but it’s a good idea to buy your own life insurance too so that your insurance continues even if you quit the job.

Consider all these factors so that you can make an educated decision while buying the best life insurance for you. Happy shopping!

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