Chartered Life Underwriter Exam 2025 – 400 Free Practice Questions to Pass the Exam

The premium rate for life insurance is primarily influenced by factors related to an individual's personal circumstances, particularly age, health, and lifestyle choices.

Age is a critical factor because as people get older, their risk of mortality increases, which generally leads to higher premium rates. Insurers often use age as a key metric in their risk assessment.

Health is another significant factor since the overall health condition of an individual directly impacts their life expectancy and thus their risk profile for the insurer. Factors such as chronic illnesses, genetic predispositions, and overall physical fitness can lead to either higher or lower premium rates based on the perceived risk.

Lifestyle choices, including smoking, diet, exercise, and occupation, can also greatly influence premium rates. For instance, smokers usually pay higher premiums due to the increased health risks associated with smoking. Similarly, individuals involved in high-risk jobs might face higher premiums compared to those in safer occupations.

While other elements like credit scores and previous claims can have some impact, they do not directly influence life insurance premiums to the same extent as age, health, and lifestyle choices. The marketing strategy of an insurance company also plays a limited role in setting individual premium rates, emphasizing that personal underwriting factors are paramount in determining costs.