Life insurance might not be something you’ve thought about yet, but, depending on a variety of factors, it might be something you should be thinking about. Experts advise that if you have people that depend on you and your income for their livelihood (like your spouse, children, or maybe aging parents) you should consider buying a life insurance policy. But what really goes into determining the cost of that policy?

Types of coverage

First of all, what type of coverage you want has a huge impact on the cost of your policy — and there are a lot of different options for you to choose from. Check out Policygenius for a huge list, plus an insurance comparison tool. One insurance expert advises that the best bang for your buck can come from a term policy, which is typically a lot less expensive than a whole-life insurance policy.

Another factor that determines the cost, of course, is what benefits you’re paying for. You can select how much coverage you want. For example, you could choose between a $100,000 policy or a $250,000 policy and that will have a big impact on your monthly premium.

The usual suspects

There are a few major factors that play a big role in determining the cost of your health insurance. Your monthly life insurance premium is often calculated based on how much of a risk you pose, and that calculation usually starts with how old you are. No matter what state of health you’re in, the average monthly premium increases about 8% each year. Not the most exciting birthday present, perhaps, but it makes sense considering what you’re buying.

Whether or not you smoke is also, not surprisingly, a huge contributor to the cost of your life insurance — maybe even more than you realize. One life insurance expert estimated that smokers can pay up to two or three times more for their monthly premium than their non-smoking counterparts. That’s a huge price difference!

And, of course, your general medical or health history has a huge impact on how much you’ll pay for life insurance. If you’re a generally healthy individual, you’ll be paying a lot less, since the insurance company will view you as much less of a risk. That may feel a bit unfair, but it’s definitely something to watch out for when you’re looking at life insurance options.

The not-so-usual suspects

But there are other factors that can impact the cost of your life insurance that aren’t so straightforward. Your driving history, for example, might be a factor in the cost. While this may sound a little bizarre, it makes more sense once you think about it — insurance companies want to make sure you’re not a reckless driver who may be putting yourself at risk. So if you’re thinking about buying a life insurance policy, you might want to avoid getting speeding tickets for a while first!

Companies may also look at your job to determine your monthly premium. Like your driving record, this is simply an indicator of how much of a risk you pose. If your occupation is pretty safe — say, working behind a desk all day — you’ll probably have a lower premium than someone with a higher-risk occupation: Lower than one of those people who has to climb all over the place fixing telephone poles. 

One of the more surprising factors, however, is also your credit history. It doesn’t play as much of a role in the cost of life insurance as the others, but it can still be a factor in the cost overall. Insurance companies don’t look too closely at your credit score, but other financial red flags, like bankruptcy, may severely impact the cost of your monthly premium.

Buy one anyway

From your age and your medical history to your driving record and your credit score, there are a lot of factors that go into determining the cost of your life insurance policy. None of these should dissuade you from getting it if you think you need it, of course, but they are things to consider as you’re planning for how much a policy is going to cost you. There’s a policy for everyone; you just need to find the one that’s right for you.