What is one major factor that determines life insurance premiums?

The health status of the policyholder is a significant factor in determining life insurance premiums because insurers assess the risk associated with underwriting a life insurance policy. A policyholder's health condition provides insight into their longevity and the likelihood of making a claim in the future. If a policyholder has pre-existing medical conditions or a history of health issues, they may pose a greater risk to the insurer, resulting in higher premiums. Conversely, a person in good health typically enjoys lower premiums since they are considered less likely to pass away prematurely. This focus on health is why life insurers conduct medical exams and review medical records during the application process to gauge risk and set appropriate rates.

Other factors like age, income level, and occupation also play roles in underwriting and premium calculations, but health status is often the most critical determinant due to its direct correlation with life expectancy and overall risk assessment.