It is a common question, and a fair one:
If two people are the same age, why would one get a much higher life insurance quote than the other?
The answer is simple. Age matters, but it is only one part of the picture. Life insurance companies look at a range of details when calculating a rate, and even small differences between two applicants can lead to very different quotes. Canadian insurers describe premiums as being based on factors like age, health, smoking status, occupation, lifestyle, coverage amount, and the type of policy being purchased.
Yes, age is one of the biggest factors in life insurance pricing. In general, the older you are when you apply, the more coverage may cost. But insurers do not stop there. They also look at the overall risk involved in insuring you, and that is where two people of the same age can start to look very different on paper.
For example, two 52-year-olds may both want the same amount of coverage, but one may have excellent health and no nicotine use, while the other may have a medical condition or a history of smoking. Even though they are the same age, their quotes may not be close at all.
Health is one of the main reasons quotes vary. Insurers may consider your medical history, current health, family medical history, and other details gathered during underwriting. Canada Life says approval and pricing can be influenced by factors like age, health, family medical history, habits, and occupation.
Smoking or nicotine use can also have a major impact. Canadian insurer guidance says smokers usually pay more because tobacco and nicotine use are linked to higher health risks, and insurers may classify someone as a smoker if they have used cigarettes or other nicotine products within the past 12 months.
Sometimes the quote difference has less to do with the person and more to do with the coverage they are choosing.
A larger coverage amount usually costs more than a smaller one. Term life insurance is also typically less expensive than permanent life insurance, because term covers a set period while permanent coverage is designed to last for life. Longer term lengths can also raise the premium compared with shorter terms.
So even if two people are the same age, their quotes may still be very different if one wants a larger policy or a different type of coverage.
Life insurance companies may also look at your occupation and lifestyle. Someone who works in a higher-risk job or regularly takes part in riskier activities may be quoted differently than someone with a lower-risk profile. RBC and Sun Life both list occupation and hobbies as factors that can influence premiums.
That means two people who seem similar at first glance can still be assessed differently once all of the details are reviewed.
Another important point is that insurers do not all assess risk in exactly the same way. Canada Life notes that each insurer can have different underwriting criteria. That means one company may view an applicant more favorably than another, which is one reason shopping around can matter.
Two people the same age can get very different life insurance quotes because age is only one part of how pricing works. Health, smoking status, occupation, lifestyle, policy type, and coverage amount all play a role.
At Specialty Life, we know life insurance quotes can feel confusing at first. That is why it helps to speak with a licensed advisor who can walk you through your options and help you understand what is affecting your rate. Call us today to explore coverage that fits your needs and your budget.
