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Factors That Affect Your Life Insurance Premium

Once you have decided to purchase life insurance, if you are like most people, you will want to find out how to minimize your costs in doing so. Being aware of the factors that affect your life insurance premiums allows you to make appropriate changes in your lifestyle to reduce your premiums as well as making you a smarter shopper when entering the life insurance marketplace.

Life insurance premiums are based upon the risk of you dying which will trigger a large payout to your beneficiaries. Therefore, your age will be one of the most important factors contributing to the cost of your premiums.

When you are young, your life insurance premiums will be relatively inexpensive, since there is a lower risk of you dying. However, since the chances of your death increase with age, your life insurance premiums will also rise accordingly. Some people are concerned about not qualifying for life insurance later in life, but it is actually rare for insurance companies to turn down an applicant simply because of their age, as long as they are willing to pay the appropriate premium for the risk they present to the insurer. So, get insurance when you need it, and not because the price will rise as you age.

Your health is another key factor contributing to your insurance costs. The better your health is, the less likely you are to die. Hence, modifying your lifestyle by stopping smoking, maintaining a moderate weight, improving your diet, lowering your cholesterol, avoiding excessive alcohol use, etc... will tend to improve your health, and thereby lower your life insurance premiums.

If you have a personal or family history of diabetes or heart disease, or have a known condition such as hypertension, obesity or high cholesterol then you will most likely have higher premiums. However, don't ever be tempted to misrepresent such information on your policy application since putting down false information may invalidate your life insurance policy, leaving your loved ones completely unprotected if you die.

The level of danger associated with your occupation also plays a part in determining life insurance premiums, since the more at risk you are when you are at work, the higher your life insurance premiums. If you are a professional race car driver, you might consider changing to a more sedate profession to reduce your life insurance premiums.

Similarly, if you enjoy taking part in high risk or extreme sports like sky diving, bungee jumping, mountain climbing or motorcycle racing, then you would expect to pay more for life insurance since you tend to take more chances with your life. You might consider forgoing these extreme recreational activities and taking up knitting or meditation instead to keep your premiums down.

One factor in determining life insurance premiums that few people ever want to change is their gender. Women pay less for coverage because they are expected to live longer than men on average.

The last, but certainly not the least factor in insurance premium costs is the type of insurance that you want, with term life insurance premiums costing considerably less than permanent life insurance premiums.

Basically, for any given level and type of life insurance coverage, your personal combination of age, gender, lifestyle choices and health factors will determine the price you pay for life insurance premiums. If those factors are low-risk in your case, then you will pay less. So reducing premium costs involves first only selecting the level and type of coverage you need, then reducing the risks in your lifestyle that you can, and finally shopping around for the best deal available from a reputable and financially sound insurance company.

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Must Know

Choosing Life Insurance Provider

In today's busy, high-stress world it should come as no surprise that life insurance as a means of providing financial protection to your loved ones is becoming more and more popular. Still the question remains: how do you choose a life insurance company that will meet your needs?

Since as many as 1,000 life insurance companies offer policies in the United States alone, it is important to keep some general principles in mind regarding their qualifications when shopping for a policy.

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Buying Life Insurance

What are the odds of you dying tomorrow? This may not be a thought that many people like to contemplate, but death is as much a part of life as having children or making a living. If you are a young person, then the thought of buying life insurance probably hasn't even crossed your mind, but as time goes on and people age, life insurance makes more sense according to the specific life situations that arise over time.

For example, if you are a person with no dependants who can cover all of the debts you have incurred during your lifetime, as well as the expenses of dying (funeral, legal fees etc.) or if you have dependents and are able to provide for them through investments or other means after your death, then you probably don't really need life insurance.

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