Fidelity Life: What Affects the Cost of Permanent Life Insurance?

Permanent life insurance offers the policyholder lifelong coverage, but it can cost much more than term life insurance. This higher premium covers the cost of lifelong coverage and the cash value component. That said, a lot goes into calculating the premiums that the policyholder will pay. So, it's critical to research policies and study the features of each before choosing a life insurance plan. Read on to learn more about how permanent life insurance works and some factors that can affect the cost of premium payments.

How does permanent life insurance work?

Permanent life insurance provides guaranteed lifelong coverage to the policyholder as long as the policyholder continues to pay premiums. In addition to the death benefit beneficiaries will receive when the policyholder passes away, part of each permanent life insurance premium also goes into cash value, a growth component that grows tax-deferred over time. The policyholder may be able to use the cash value when it's large enough by borrowing or withdrawing from it, and on some policies, paying premiums.

There are many forms of permanent life insurance. Each one works slightly differently regarding how the premiums and death benefits work and how fast the cash value grows. But keep in mind that they all provide lifelong coverage and the cash value component.

Factors that impact the cost of permanent life insurance

Here are some factors that can affect the life insurance premiums policyholders have to pay: 


Older people are more likely to die while the policy is in-force — both due to increased risk of medical issues and old age. So, older age tends to correlate with higher premiums. That said, younger people may be able to lock in low premiums on some permanent policies. As they age, their premiums stay the same.


Since women typically live longer than men, this means a woman is more likely to get a lower rate than a man on a permanent life insurance policy.

Policyholder and family medical history

Many life insurers may require the policyholder to undergo a medical exam before issuing the policy. The examiner will gather the policyholder's medical history and some vital metrics during this exam.

A history of illnesses or diseases, such as heart disease or diabetes, can increase premiums. Additionally, metrics like blood pressure and cholesterol levels can help predict potential future health issues, so these also affect premiums.

The examiner will also ask the policyholder for their family medical history. Even if the policyholder is perfectly healthy, a family history of disease could indicate increased chances of future medical problems.


Since smoking can cause or increase the risk of various health problems, such as heart disease, cancer, and dental issues, smokers may face higher premiums. That said, policyholders who have quit smoking after getting their policy may be able to ask their insurer for a lower rate.


Some jobs, like airline pilots or construction workers, are considered riskier than others. Life insurance providers may charge policyholders more if they hold one of these jobs.


Similar to jobs, some hobbies are considered much riskier. Insurers may charge more if the insured participates in hobbies and interests such as rock climbing, skydiving, and racing cars. 

The death benefit

The death benefit is the amount paid out to beneficiaries upon the policyholder's death. The larger the death benefit, the more the premiums will cost.

The bottom line

Ultimately, life insurance companies calculate the risk of the policyholder dying while the policy is active. The lower the risk, the lower the premiums. Policyholders can't change all of these factors, such as age and medical history, but they may be able to alter some, such as smoking, hobbies, or jobs. Beyond that, they should evaluate their death benefit needs, since that can also affect policy premiums. Policyholders should weigh their options and consider working with a licensed life insurance agent to find a life insurance plan with premiums and coverage that work for their needs. 

For all media inquiries, contact: 

Laura Zimmerman, Chief Marketing Officer, (312) 288-0068

Source: Fidelity Life