How Does The Insurance Company Determine My Life Insurance Premium?

The agent's commissions, overhead, and expenses of doing business are other factors in determing the premium.

Ideally, to get the best rate, one would want to be classified as a "preferred" risk or below-average risk of early death. Other classifications include "standard" (average risk of death), or "substandard" (insurable, but with an above-average risk of death). Sometimes someone is such a high risk that they are classified as "uninsurable" (a high probability of early death).

Just because one company classifies someone as uninsurable it is possible to get a different classification from another company since insurance company's classification criteria vary. In addition, some companies will remove a rated premium if you maintain good health for a specified period, give evidence that your health has improved, or change to a less-hazardous occupation. Being a non-smoker carries a strong advantage when looking for low life insurance rates.