Why might a life insurance policy premium be higher than the standard rate?

A life insurance policy premium being higher than the standard rate is often a result of the insured not meeting established underwriting requirements. Underwriting is the process through which insurance companies assess the risk associated with insuring an individual. If an individual presents certain risk factors—such as health issues, high-risk occupations, or other relevant concerns—these can lead to a higher premium because the insurer must account for the increased likelihood of a claim being made.

In contrast, being a minor typically leads to a lower premium due to assumed lower risk; meeting all underwriting requirements generally results in standard premiums; and having a preferred occupation often leads to lower rates due to reduced risk associated with the job. Thus, when the individual does not meet the underwriting criteria, possibly indicating a higher risk level, the premium will reflect that by being set higher than the standard rate.