Which factor is most important when determining an individual’s life insurance premium?

The most important factor when determining an individual's life insurance premium is the applicant's age and health status. Insurers assess these two factors because they directly influence the risk of premature death. Generally, younger individuals are perceived as lower risk compared to older individuals, as they have a longer life expectancy. Additionally, health status plays a significant role; applicants who are in good health typically qualify for lower premiums since they are seen as less likely to require benefits in the near term.

Other factors, while relevant in certain contexts, do not weigh as heavily as age and health. For example, an applicant's credit score might influence the premium to some extent, but primarily it affects financial responsibility and payment behaviors rather than the risk related to life expectancy. An applicant's occupation can provide insights into potential hazards associated with their job, but it does not capture the broader risk associated with their health and lifespan. Hobbies might indicate a level of risk associated with lifestyle choices, but again, they are secondary to the fundamental considerations of age and health when calculating life insurance premiums.