Final answer:
The factor not considered when establishing life insurance costs is 'Number of dependents'. Life insurance premiums are based on factors like age, health habits and the amount of insurance coverage, with the number of dependents affecting coverage amount rather than the cost directly.
Step-by-step explanation:
The factor that is NOT considered when establishing the costs of a life insurance policy amongst the options provided is D. Number of dependents. Life insurance premiums are typically calculated based on factors such as the policyholder's age, health habits, and amount of insurance coverage. The number of dependents does not directly impact the cost of the policy although it may influence the amount of coverage an individual chooses to purchase.
Insurance companies use actuarially fair premiums to determine costs. Factors like family history of illnesses, such as cancer, can affect the premiums because they change the statistical risk associated with the individual. These determinants influence the probability of payouts from the insurance company's perspective, which is reflected in the premiums charged.
Life insurance companies assess personal habits and medical history to determine the risk of mortality, which consequently affects life expectancy. While personal preferences and healthcare expenditures can have a significant impact on health outcomes, in the context of life insurance, it's the personal habits and medical history that predominantly factor into the cost of the policy.