How Life Insurance Premiums are Determined

You may not realize that your life insurance premiums in the Lansdale, PA area are based on several factors. As you may imagine, part of your score is based on your health status, but did you also know that your age, gender, height/weight, lifestyle choices (drug or alcohol use), family health history, driving record, mental health, and credit history also factor into the equation? 

When applying for life insurance, be prepared to answer questions in these areas of your life. The idea behind the life insurance score is to place you in a classification that is used to predict the likelihood of you filing a claim. These categories were determined by gathering data from claims submitted. Here are the top classifications as examples:

  • Preferred Select – the person has excellent health, average height and weight, no tobacco use in 3-5 years, risky lifestyle choices, no family health risks like heart disease, no mental illness, a high credit score, and have no more than 2 moving violations in 3 years.
  • Preferred – the person has the same things as the preferred select, but they may have a couple of minor issues like a slightly elevated cholesterol level, arthritis, or asthma, and their credit score may be lower.

The increased number of areas the individual has issues in, the lower the classification. The lower the classification goes and the higher the life insurance premium goes. Keep in mind that you can make changes to your health, credit, driving record, and lifestyle choices and you should have your life insurance premiums evaluated periodically.

Farrell Insurance Associates, Inc.

Farrell Insurance Associates, Inc. provides coverage across the Lansdale, PA area. Figuring out life insurance premiums can be complicated, so contact a Farrell Insurance Associates, Inc. agent to help you find the life insurance that fit your needs.