Final answer:
The factor that has the greatest impact on life insurance premiums is the risk group a person belongs to. Insurance companies charge premiums based on the likelihood of an adverse event occurring.
Step-by-step explanation:
The factor that has the greatest impact on life insurance premiums is the risk group a person belongs to. Insurance companies charge premiums based on the likelihood of an adverse event occurring. Different factors like genetics, personal habits, and geographic location can affect a person's risk level.
For example, individuals with pre-existing conditions or older individuals may be charged higher premiums due to their expected higher healthcare costs. Actuarially fair insurance takes into account these risk factors and charges premiums accordingly.