What factor primarily influences the cost of life insurance premiums?

The primary factor that influences the cost of life insurance premiums is the insured's age and health. Insurance companies assess the risk associated with insuring an individual when determining premiums. Generally, younger individuals are considered lower risk because they are statistically less likely to pass away before their policy expires. Similarly, an individual's health status plays a crucial role; those in better health may qualify for lower premiums compared to individuals with pre-existing conditions or unhealthy lifestyles.

Age and health are directly related to the life expectancy of the insured person, impacting the likelihood of a claim being made. Consequently, insurance providers use this information to calculate the appropriate premium that reflects the risk they are taking on. This means that, as age increases or if health deteriorates, premiums may also rise to account for the higher risk of payout.