Think you know how much life insurance costs? Think again.

According to LIMRA’s 2015 Insurance Barometer study, 80% of Americans are still overestimating the cost of life insurance. Millenials overestimate the cost of life insurance by 213%, and Gen Xers overestimate it by 119%. They are also confused about what factors are used to underwrite life insurance.

What really goes into determining your rate for life insurance, and what can you do to lower the cost of your polices?

In order to calculate a premium, life insurance companies calculate life expectancy by taking into account health choices including tobacco use, maintaining a healthy weight and keeping chronic conditions, like diabetes, under control. Reporting weight loss, beginning a tobacco cessation program and following prescribed treatment for chronic conditions can all result in savings on monthly premiums.

There are other lifestyle behaviors that may be just as important to lowering the costs of premiums, including having a safe driving record and maintaining a good credit score. In addition, activities such as scuba diving, recreational flying and boat racing can affect life insurance premiums, so it’s a good idea to have a conversation with a financial advisor to review all certifications and licenses prior to applying for coverage.

How you buy and manage your policy can be just as important to lowering the cost of insurance as your lifestyle choices. One of the best ways to save on life insurance premiums is to buy earlier on in life. Additionally, carriers may offer discounts for those who pay premiums annually rather than on a monthly basis. All carriers agree that an annual review of your policy is an important way to make updates that may result in cost savings. Reviewing your policy is a good way to make sure you have your needs covered. You may need to increase or decrease your death benefit, or you may want to convert a term policy into a permanent one. A marriage or divorce may mean you need to rethink your beneficiaries.

The underwriting process for life insurance doesn’t need to be unnecessarily complex. You will be asked to fill out an application that and answer medical questions. For most policies, your medical records will be requested, and you will get the best physical you ever had, for free, by a paramedic who will schedule to come to your home or business at your convenience. A good agent can help smoothly handle requests by the insurer for further information.

With over 40% of Americans lacking any life insurance at all, it’s important to address your needs with a qualified life insurance agent.

Emily Champoux, Benefits Advisor