When you apply for life insurance, you're doing more than just choosing a policy—you’re entering a comprehensive risk evaluation. Insurance companies use underwriting to determine how likely it is they’ll have to pay your death benefit. That assessment ultimately impacts whether you get approved and how much you’ll pay in premiums. In some cases, it even determines whether the insurer might later contest or deny a claim. By understanding the factors that underwriters examine, you can make better decisions during the application process and potentially avoid future claim complications.
What Factors Affect Your Life Insurance Risk Rating?
Insurers look at a broad range of personal, health, lifestyle, and financial data to determine your risk level. Every applicant is placed into a risk class, such as Preferred Plus, Preferred, Standard, or Substandard. These classifications are used to set premiums—and to decide whether a policy will be issued at all.
Age: A Fundamental Risk Indicator
Your age plays a pivotal role in underwriting. Statistically, younger individuals live longer, and insurers are less likely to face a payout in the near term. As a result, younger applicants typically receive lower premiums. Underwriters use actuarial tables to weigh your age against the average life expectancy in your demographic. For example, a healthy 30-year-old might qualify for top-tier rates, while a 60-year-old with similar health may face higher premiums due to a shorter expected lifespan.
Health and Medical History: The Biggest Determinant of Risk
Health status is one of the most heavily scrutinized areas in life insurance underwriting. Underwriters assess:
Chronic illnesses such as heart disease, diabetes, or cancer
Your body mass index (BMI) and weight trends
Blood pressure and cholesterol levels
Use of tobacco or nicotine products
Family medical history, particularly hereditary diseases or early deaths
Most insurers require a medical exam and access to medical records. Some use prescription databases and lab results to identify red flags. If you’ve had serious conditions in the past or are managing ongoing health issues, you may receive a substandard rating or be denied coverage entirely. Even “no-exam” policies involve background checks and are priced significantly higher due to the lack of detailed health data.
Lifestyle and Habits: Everyday Choices That Raise Red Flags
Your personal habits can increase your risk classification, even if you’re otherwise healthy. Risky behaviors underwriters consider include:
Smoking or vaping (smokers may pay 2–3 times more than non-smokers)
Regular alcohol consumption or history of substance abuse
Participation in dangerous hobbies like scuba diving, hang gliding, or rock climbing
Employment in high-risk professions such as law enforcement, firefighting, or aviation
The more risk associated with your daily life, the more likely you are to trigger a future payout, leading to higher premiums or stricter underwriting scrutiny.
Gender: A Legally Allowed Factor in Most States
Gender remains an accepted underwriting factor in the majority of states. On average, women outlive men by about five years, according to CDC data. Because of this, women often qualify for lower premiums for the same level of coverage. While some states and jurisdictions are considering changes to this practice, it remains standard in most parts of the U.S.
Policy Type, Size, and Term: More Coverage, More Scrutiny
The kind of policy you apply for also affects the level of underwriting involved. Term life insurance typically involves lower risk for the insurer, since coverage ends after a fixed period. Permanent life insurance—such as whole or universal life—is more expensive and involves longer-term obligations for the company. Additionally, high-value policies (over $1 million) often trigger enhanced financial and medical underwriting, with insurers asking for tax returns, physician statements, or even interviews to verify insurable interest and financial justification.
Financial Underwriting: Ensuring a Legitimate Need
Life insurers don’t just evaluate your health—they assess your financial circumstances as well. Insurers want to ensure the policy is proportional to your income, assets, and liabilities. They evaluate:
Your annual income
Existing debt, such as mortgages or business loans
Number of dependents
Purpose of the insurance (income replacement, estate planning, business succession)
If you apply for a large policy without sufficient financial backing, the insurer may view it as a red flag and either reduce the benefit amount or decline the application.
The Underwriting Process: What Happens Behind the Scenes
Each insurer uses its own methods to evaluate applicants. Traditional underwriting can take several weeks and may include a paramedical exam, bloodwork, medical records, motor vehicle reports, and prescription history. Some insurers use accelerated underwriting that relies on AI to scan your digital footprint, including pharmacy records, credit behavior, and driving history. These methods speed up approval but can lead to denials or higher premiums if your profile contains inconsistencies.
Denied Due to Risk? You Have Options
If you’ve been denied coverage or offered a policy with steep premiums, it doesn’t mean you’re out of options. You may have better luck with a different insurer, a simplified issue policy, or a guaranteed issue policy (which requires no medical exam). However, if you suspect the denial is unjust or discriminatory, or if you later encounter a denied claim related to the insurer’s underwriting findings, a life insurance attorney can help challenge the decision and protect your rights. An Indiana life insurance lawyer can help,
FAQ: Life Insurance Risk Factors and Underwriting
What is the main purpose of life insurance underwriting?
Underwriting helps insurers evaluate how likely they are to pay a death claim. It determines your approval status, coverage terms, and premium cost based on risk.
Does smoking really affect life insurance premiums that much?
Yes. Smokers often pay 2–3 times more than non-smokers due to increased risk of early death from cancer, heart disease, and respiratory illness.
What health conditions cause automatic denial?
Not all conditions lead to denial, but late-stage cancer, uncontrolled heart disease, and recent strokes or hospitalizations often result in rejection or substandard classification.
Can family history impact my ability to get life insurance?
Yes. A history of early death from hereditary conditions (like heart disease or breast cancer) can increase your risk rating, even if you’re currently healthy.
Do life insurance companies check my credit?
Insurers may check your credit score or financial history indirectly, especially when assessing large policies, to confirm income stability and financial need.
Will my job affect my premium?
Yes. High-risk occupations such as firefighting, deep-sea fishing, or construction work are considered more dangerous and may raise premiums.
Is a medical exam always required?
Not always. Some policies skip the exam, but they tend to cost more due to the lack of risk detail. These are known as simplified or guaranteed issue policies.
Can I lower my life insurance risk?
Yes. Improving your health, losing weight, quitting smoking, and reducing alcohol intake can all help. Applying at a younger age is also beneficial.
Why was I denied life insurance after applying online?
Online applications often use automated underwriting that flags risk factors quickly. A human underwriter may offer a different decision, so it’s worth following up or applying elsewhere.
What if I’m denied life insurance unfairly?
You can appeal the decision or reapply with another company. If you believe the denial was based on incorrect or discriminatory information, speak with a life insurance attorney.