When you apply for life insurance, you're not just selecting a policy—you’re also being evaluated. Insurance underwriters assess your level of risk, which is essentially how likely it is that the insurer will have to pay out your death benefit. The higher your perceived risk, the more expensive your policy will be—or the more difficult it will be to get approved at all.
Understanding how insurance companies determine this risk can help you better prepare for the application process and potentially lower your premiums. Here are the top factors underwriters consider:
Age
Your age is one of the most important predictors of life insurance risk. Statistically, the older you are, the higher your chances of developing health issues or passing away within the policy term. This is why younger applicants typically receive lower premiums—they represent a longer potential timeline before a claim would be paid.
According to data from the Social Security Administration, life expectancy rises with age but starts to level off in later decades. Underwriters use actuarial tables to compare your age against national averages and adjust risk accordingly.
Health and Medical History
Health is a major factor in risk classification. Underwriters will examine:
Pre-existing conditions (like diabetes, heart disease, or cancer)
Family medical history (especially if relatives passed away from hereditary illnesses)
Body Mass Index (BMI)
Blood pressure and cholesterol levels
Use of tobacco or excessive alcohol
Life insurance companies often require a medical exam as part of the process, although some offer no-exam life insurance options at higher premiums. If your health profile shows elevated risks, you may receive a substandard rating or be denied coverage.
Lifestyle and Habits
Your daily activities and personal habits play a key role. Underwriters consider:
Smoking status (a smoker can pay up to 2–3 times more than a non-smoker)
Alcohol consumption
Recreational drug use
High-risk hobbies like skydiving, scuba diving, or racing
Dangerous jobs like firefighting, commercial fishing, or mining
The riskier your lifestyle, the higher the chance of premature death—and therefore, a potential payout for the insurer.
Gender
While this might surprise some applicants, gender is a legally allowed underwriting factor in most states. Women, on average, live longer than men, and life insurers adjust pricing accordingly. As a result, women often pay lower premiums for the same coverage amount and term.
The Centers for Disease Control and Prevention (CDC) reports that women currently outlive men by about five years in the U.S., a significant factor in risk calculations.
Policy Amount and Term Length
The size and length of your policy matter. A $2 million policy is a much greater risk to an insurer than a $250,000 one. Similarly, a 30-year term involves more uncertainty than a 10-year policy. Higher face amounts or longer durations lead to stricter underwriting and higher premiums.
If you're looking for a large benefit amount, you’ll likely need to submit more documentation and undergo a full medical exam.
Financial Underwriting
Beyond physical health, financial health is also assessed. Insurers want to ensure there’s a legitimate financial reason for your coverage. This includes:
Income
Debts (like a mortgage or business loans)
Number of dependents
Estate planning goals
This step is especially important for high-value policies. If someone is applying for $5 million in coverage but only earns $30,000 annually, the insurer may question the legitimacy of the request.
Type of Policy
Different policy types carry different levels of risk for insurers. For example:
Term life insurance is often cheaper because it provides coverage for a limited time (10, 20, or 30 years). If you outlive the term, the insurer pays nothing.
Permanent life insurance (like whole or universal life) covers you for life and often includes a cash value component. These policies are more expensive and represent a longer-term liability for insurers.
Some no-lapse or guaranteed policies may also come with higher premiums due to reduced underwriting risk for the policyholder.
The Underwriting Process Itself
Finally, each insurance company uses its own underwriting models. Some perform full medical underwriting with lab work, physician statements, and detailed questionnaires. Others use accelerated underwriting or AI-based assessments that pull data from prescription history, credit, driving records, and even social media.
Companies with more advanced or lenient underwriting may approve applicants that others would reject—but at higher costs.
Final Thoughts
Your risk profile is what determines your eligibility and premium cost for life insurance. While some factors—like age and gender—are out of your control, others can be managed. Improving your health, quitting smoking, and applying at a younger age can all reduce your risk in the eyes of an insurer.
If you’ve been denied coverage or received unexpectedly high quotes, a life insurance attorney or broker can help you understand your rights and find the best policy for your situation.