Term life insurance has so many varying degrees of determining the overall prices of policies that it is nearly impossible to clarify what term life insurance should cost a consumer. There are generalized prices that are predetermined that do provide a rate that an individual can expect to pay for a policy. These basic rates are typically calculated by geographic location and an applicants’ age. Going forward from these two basic factors, adding in personal information, the policy premium and approval status can vary greatly.
Average Costs at Certain Ages
Every life insurance quote has an average cost for term life insurance based upon consumers’ age and geographic location. Using a person’s age and zip code, an insurance broker or insurance company can provide a basic quote for a consumer letting them know what they should expect to pay for term life insurance. In addition to these factors there are many other components that are taken into consideration before a final premium is determined. It would be inaccurate to simply quote an individual based upon their zip code and birth date.
Height, Weight and Tobacco
Some of the most common elements that affect an applicants’ life insurance rates are their height, weight and whether or not they are a tobacco user. The height and weight of an applicant helps the insurance company determine what category the applicant will fall into; preferred plus, preferred or standard. Preferred plus status has the lowest premium rates, preferred being the second best and most common, and standard being the most expensive rates. If a person uses tobacco their rates will increase as well.
Increase for Activities
Another factor that can affect rates is a dangerous occupation or extracurricular activities. If an applicant has a dangerous occupation they may find their rates increased and it is even possible that coverage could be declined. Dangerous occupations greatly affect the cost of life insurance. Extreme sports or high risk activities can also cause an insurance policy to be declined or rated up for the higher risk involved in insuring the applicant.
Term and Amount of Coverage
Finally, the term of the policy and the amount of coverage impacts the rates of the life insurance plan. The term of the policy can vary greatly depending on what the applicant desires to apply for. Term life insurance can be purchase for as little as one year and up to a maximum of 30 years. Additionally, the amount of coverage purchased will have the greatest impact on the premium for the term life insurance policy.
Term life insurance rates have so many variables it is hard to say what term life insurance should cost typically. Yes, there are generalized rates, but with so many factors that affect those rates it is unfair to provide a quote to clients without knowing a bit more personal information and getting them a customized quote, saving them from finding out they get a completely different rate later. About the only thing a consumer can count on for term life insurance rates is that they are much less expensive than other types of life insurance policies.