Premium
What you pay, why it's priced the way it is, and what changes it.
The amount you pay — monthly or annually — to keep your life insurance policy in force.
What determines your premium
A life insurance premium is the price of the coverage, paid on a schedule you choose — commonly monthly or annually. Insurers set it based on the risk they are taking on, which comes down to how likely and how soon they expect to pay a claim. The main factors are your age, sex, smoking status, health, family medical history, occupation, and lifestyle, along with the type of policy and the face amount.
Age and smoking status tend to move the number the most. Premiums generally rise with age because the probability of a claim increases, which is why buying earlier usually locks in a lower rate. Non-smokers pay materially less than smokers for the same coverage. Beyond that, the product itself matters: permanent coverage costs more than term for the same face amount because you are also funding lifelong protection and, in some cases, cash value.
Level, increasing, and flexible premiums
Premium structure varies by product. Many term and permanent policies use a level premium that stays fixed for a defined period or for life, so you know exactly what you will pay. Some coverage, such as yearly renewable term, starts cheaper and rises over time. Universal life offers flexible premiums within limits, which gives control but requires you to keep the policy adequately funded.
Understanding the structure before you buy prevents unwelcome surprises. A level premium that looks slightly more expensive today can be far cheaper over a long horizon than a rising premium that overtakes it. When comparing quotes, compare the full cost over the period you expect to hold the coverage, not just the first month.
What happens if you miss a payment
Policies include a grace period — a window after a missed payment during which coverage continues and you can pay without penalty. If the premium remains unpaid past the grace period, the policy can lapse and coverage ends. On some permanent policies with cash value, an automatic premium loan feature can cover a missed payment from the cash value to keep the policy in force.
If a policy does lapse, reinstating it later often requires re-qualifying medically and paying back premiums, and it is not guaranteed. Because reinstatement can be harder and more expensive than staying current, it is worth setting up automatic payments and reviewing affordability before you commit to a premium level.
Common questions
Why did my life insurance quote go up compared to last year?
For new coverage, age is usually the biggest driver — premiums rise as you get older because the insurer's risk increases. Changes in health, a switch from non-smoker to smoker status, or applying for a different policy type or amount can also raise the price. Locking in coverage earlier generally means a lower rate.
Do smokers pay more for life insurance?
Yes, typically a good deal more than non-smokers for the same coverage, because tobacco use raises the insurer's expected risk. Many insurers will re-rate you as a non-smoker after a sustained period without tobacco, so it can be worth reapplying once you qualify.