What's my rate?
The price of life insurance is discussed in terms of rates because when you buy life insurance, you don't pay for it all at once; you make periodic payments called "premiums" for as long as your policy is in force. (This is a generalization. With some types of life insurance, you can pay all at once, and with some other types, your payments do not need to be periodic.) You stop paying premiums as soon as your policy expires or as soon as your insured dies.
Life insurance rates are calculated based on the mortality risk of the individual(s) being insured and on the value of the policy. If the insured has very poor health, the life insurance rates you pay will be higher. If the policy offers a large death benefit, your life insurance rates will be higher.
With some types of life insurance, such as term life insurance and traditional whole life insurance, the rate you pay is fixed. But with some other types of life insurance, the rate you pay may change. This change may hinge on the age of the insured, the age of the policy, or the amount of cash value you have stored up in your policy.
Your life insurance rates will not change to reflect the changing mortality risk of the insured, however. Once your policy goes into force, the health class of the insured is locked in, so if the insured develops a serious illness like cancer, it will not affect your life insurance rates.
