How Are Life Insurance Premiums Calculated?

life insurance premiums

Have you ever wondered how your insurance company arrived at your premium payment amount? Does it seem like some mysterious formula that seems Greek to you? Is there anything you can do to reduce your premiums or are you just stuck with the amount they give you?

Life Insurance premiums are calculated after looking at an individual’s health risk factors, such as tobacco use, cholesterol level, obesity, diabetes and family history.

When applying for life insurance, the insurance company will determine your status based on your age, gender and overall health. Since women statistically live longer than men, their premiums are usually lower. Plus, younger people have lower premiums because they typically have a longer period of time to pay their premiums and tend to have fewer health problems than older people. Since there really isn’t anything you can do about your age or gender, these factors aren’t controllable.

So, let’s talk about what factors you can control. Your lifestyle, whether or not you engage in dangerous activities and whether you have health issues you can change (example: smoking-related asthma) will affect your premium.

When applying for life insurance, you will be asked to provide information about your medical history and take a physical examination. If you are not completely truthful about your medical history, you may lose your policy or, when you die, your dependents may be denied death benefits. Therefore, it is imperative that you tell the truth throughout this process.

A medical practitioner hired by the insurance company will typically come to your home to administer an exam. This person will check your weight, blood pressure and other vital signs. They may also take a blood and/or urine sample to test for signs of disease, your cholesterol level, the presence of nicotine and the presence of illegal drugs. In rare cases, depending on your health history, you may also need X-rays or an EKG.

After this process and based on the results of your medical history and medical exam, the insurance company will determine your premium. There are health factors that you can change to lower your premium. For instance, you could:

  • Stop smoking
  • Lose weight
  • Improve your cholesterol levels
  • Take necessary medications as directed by your doctor


If you have taken the steps to improve controllable health factors, such as quitting smoking, you may contact the insurance company and ask about lowering your premium.

In addition, you may be able to make lifestyle changes that can lower your premium as well. If you have been engaging in dangerous sports or activities and decide to give them up, you should notify your insurance company and request a premium review to see if your premium can be lowered.


Roper Insurance can help you find the right insurance policy for you, no matter your risk factors. If you believe your life insurance premiums are too high and may be able to be lowered or you don’t have life insurance, call us today at 303-721-1145 or message us through the Contact button above for a free, no-obligation Life Insurance Review.