They analyze the risk of you dying by reviewing your responses to the questions on the application and results of your physical exam. Their goal is to take care in choosing who they insure, so their insured lives longer and pays more premiums.
Basically, the same risks we are all concerned about with our health and longevity. Subjects we hear discussed each day on the news and in newspapers and magazine articles: High cholesterol, smoking, chewing tobacco, diabetes, being overweight, HIV, and other illnesses and diseases related to poor health and causing early death.
In considering these risks, the life insurance company selects a grade or status relating to your health. These ratings include: Preferred risk, Standard risk, Super Preferred risk, among others.
Learn more about how term life insurance prices are calculated.