A life insurance company is more likely to make payouts when policyholders exhibit specific risk factors. Therefore, companies evaluate a range of factors to assess the level of risk associated with potential policyholders. These assessments help insurers set premiums to reduce adverse selection and maintain a balanced pool of policyholders.

One significant factor influencing risk is biological sex. For instance, life expectancy varies between men and women, with men tending to have shorter lifespans than women. 

Tobacco use is a major risk factor. Smoking is linked to many medical conditions, including lung cancer. It greatly increases the risk of early death.

Similarly, a buyer's family health history is scrutinized for patterns of inherited conditions like hypertension, which may predict future health risks.

Occupation also plays a role in determining risk levels. Jobs that involve frequent exposure to danger, such as logging, increase the potential for injury or fatality. 

Likewise, recreational activities are considered. For example, an individual regularly engaging in skydiving is viewed as taking on higher personal risks, potentially shortening their life expectancy.

Companies adjust premiums to create a system where higher-risk buyers contribute more. This helps maintain balance in the insurance market. Without it, more high-risk individuals would seek insurance, which could lead to adverse selection.