Explaining how term life insurance premiums are set

Life insurers base term life insurance rates on the age, general health and whether the named insured cigarettes tobacco. The named insured is the person whose life is covered by the insurance program. There are no medical assessments required when applying for the phrase coverage. Instead, the private information of the named insured is compared to mortality tables which make it possible for life insurance companies to calculate the probability of a person dying while the insurance program is in effect and think of a term life premium. Although it is somewhat simple for insurers to produce speeds, they do adjust term life costs by age. The younger someone is, the easier it will be to find inexpensive term coverage. However, the older the named insured is, the higher the rate will be for the life policy.

Although term life plans can be quite affordable for younger folks, if the named insured also smokes tobacco, the term life insurance prices also will be a lot higher. Individuals who smoke cigarettes and other tobacco products typically are billed about double the number nonsmokers must cover the same length of term coverage with the exact same death benefit. Nonsmokers can find a term 30 insurance plan with a 250,000 dollar death benefit for approximately 15 dollar per month from a number of life insurers. Those who smoke tobacco will be charged about 30 dollar per month for the same death benefit on precisely the identical life plan. However, the rate for even those that are smokers is a lot lower than would be paid for a whole life plan with the exact same death benefit.

For nonsmokers in good health and with no family history of cancer, cardiovascular disease or other potentially lethal diseases, the monthly premium may be as large as 200 dollar or more for a whole life insurance plan with a 250,000 dollar death benefit. That makes a term policy a less expensive option for lots of men and women. About the only time term policies can be somewhat pricey is when the named insured is in retirement years and needs a large death benefit or if the policyholder chooses a yearly renewable plan. Yearly renewable term coverage is renewed, the premium will rise. Doing this kind of policy for ten years or more could lead to premiums that will be a lot greater than if simply purchasing a 10year term program or even a whole life insurance plan over the long term.