Getting life insurance for the first time can be a strange experience – how do you know what you need to get and how much to pay? There are a lot of questions that insurance companies ask when you apply for life insurance to assess what kind of risk you will pose to the company. Knowing how to navigate these questions will help you get a great deal.
So if you’re getting life insurance for the first time or thinking about finding a new policy with a lower premium, it pays to know what criteria insurers use when setting rates and what you can do to improve your chances of getting the best price.
Age and Gender
These two factors have the biggest impact on your insurance rate. Clearly, youth has its advantages when it comes to getting a good life-insurance rate. And women usually get lower rates because they have longer life expectancies (giving the insurance company more years to collect premiums before it has to make a payout).
Apply when you’re younger. But remember, you really only need life insurance if someone else is depending on your income, such as a spouse or a child. So if you’re single and in your twenties, don’t feel like you have to rush to get a policy now just to snag a good rate. You still can get insurers’ preferred rates in your thirties and forties.
Smoking
Smoking is one thing that will cause your life insurance rates to go through the roof. If you are 40 and have been smoking since your 20s you will probably pay up to triple what a non-smoker pays. If you want to get your life insurance rates down, one of the best things you can do is to quit smoking. Once you are smoke-free for two or more years your rates will go down.
Health
The healthier you are the better rate you are going to get when you apply for life insurance. If you have high cholesterol or a history of heart disease in your family you are probably going to pay more for your life insurance. Other pre-existing conditions, like cancer or other similar diseases with high mortality rates, will also cause your rates to sky rocket. If you have a minor condition, like asthma, digestive distress or even diabetes, and are under proper care for these conditions, then your insurance company will consider these minor conditions and cut you a break.
Get a physical before applying to find out if you have high blood pressure, high cholesterol or any other treatable condition. Start taking medication to get it under control.
Most importantly, don’t wait until you have a serious ailment to apply for life insurance. If you do have a health condition, work with a broker who knows which companies would be more likely to insure you at the best rate.
Family history
The last important thing that insurers look at is your family history. This means the insurance company wants to know if anyone in your family has been diagnosed with a serious disease. If they have, this enhances your chances of also contracting a disease and thus your rate will be higher.
Again, use an online quote site or shop around to find insurers with more-lenient standards. For example, say you had a parent who died of a heart attack at age 69. That wouldn’t preclude you from getting the best rate because some insurers ask whether you had a parent who died of heart disease before age 60 (as opposed to age 70, which is the standard many insurers use).
About the Author: Ashley Jones is an investigative writer for the Texas insurance industry. Jones helps potential insurance buyers navigate the tricky waters of the insurance industry through covering topics such as Texas auto insurance, home insurance and life insurance.
