Which factor does NOT influence life insurance premiums?

Which factor does NOT influence life insurance premiums?

• A. Health of the insured
• B. Lifestyle choices
• C. Number of dependents
• D. Age of the insured

Answer: (C)

The number of dependents does not directly influence life insurance premiums because premiums are primarily determined by the individual characteristics of the insured person, such as their health, lifestyle choices, and age. Insurance companies assess the risk associated with insuring a person primarily based on these factors. While having dependents can affect the amount of coverage needed—such as suggesting a higher coverage to ensure financial support for those dependents—it does not inherently change the pricing of the policy itself in relation to the assessed risk. The other factors, like health, lifestyle choices, and age, all directly contribute to determining the risk level and, consequently, the premium that an insurer charges. For instance, a younger person in excellent health may receive a lower premium compared to an older individual with pre-existing health conditions, reflecting their relative risk profiles.

The number of dependents does not directly influence life insurance premiums because premiums are primarily determined by the individual characteristics of the insured person, such as their health, lifestyle choices, and age. Insurance companies assess the risk associated with insuring a person primarily based on these factors.

While having dependents can affect the amount of coverage needed—such as suggesting a higher coverage to ensure financial support for those dependents—it does not inherently change the pricing of the policy itself in relation to the assessed risk. The other factors, like health, lifestyle choices, and age, all directly contribute to determining the risk level and, consequently, the premium that an insurer charges. For instance, a younger person in excellent health may receive a lower premium compared to an older individual with pre-existing health conditions, reflecting their relative risk profiles.