Ever since the 17th century, when Edmund Halley, (the famous English astronomer that Halley’s Comet is named after) created the very first scientific table outlining a person’s presumed longevity; insurance companies have had the blueprints to modern-day life insurance plan calculations. Halley’s “mortality tables”, as they were called, relied heavily on factoring in a person’s age, location, occupation, risk factors (smoker, drinker, extreme athlete, etc.), and common sense (a man who is 98 years old is far more likely to pass away than a man who is 35 years old) to calculate a person’s individual mortality rate.
In the present, life insurance companies use a very similar formula to illustrate just how risky a potential client would be as an investment. When weighing the person’s inherent risk factors, the company is then able to determine how much to charge the individual for a life insurance policy.