What Are Premiums Based On ?
Life insurance premiums are based on the probability of the policyholder fulfilling an average life expectancy and any factors that reduce this probability will lead to higher premiums or possibly, exclusion. Short-term impacts, such as pandemics, have little effect on premiums because providers assess risk over long periods of time.
Insurers will look at a variety of factors in setting premiums; age, pre-existing medical conditions and lifestyle are some. Those with high blood pressure or weight problems, smokers or heavy drinkers will face substantially increased premiums. High-risk jobs and dangerous sports, such as diving and parachuting, will also make premiums shoot up. However, it is important to note that definitions of what constitutes a high-risk job or hobby will vary from one insurer to the next.
