What are the factors that raise life insurance rates? Here’s 6 items at the top of the list.
[Editor’s Note: This blog was originally published on March 3, 2014. The content has been updated.]
Insurance costs vary and depend on a number of factors. Age, sex, medical history, profession, and location are a few examples of the factors that go into calculating insurance premiums.
Taking precautions and cutting out bad habits or improving on certain lifestyle shortcomings can result in lower rates.
Factors that cause a rise in life insurance premium rates
- Smoking or tobacco intake. One of the most expensive habits you can have, premium-wise. A cigarette smoker on average can be asked to pay up to 50% more than a non-smoker. Quitting tobacco will help bring your rates down, but only after a lengthy observation period. Most insurance firms wait at least 1 year before offering a partial rebate, and a full 3 years before allowing for parity in terms of premium rates.
- Obesity. By itself, obesity isn’t a cause for an increase in premium rates, but because obesity more often than not results in heart issues and/or diabetes, it is considered a major determinant when calculating insurance premiums. If your Body Mass Index (BMI) is even slightly over what is considered healthy, your premium rates will reflect this. It is advisable to make sure you aren’t overweight when going in for your medical checkup, and make sure your recent medical records don’t allude to obesity either, because they will be checked.
- Other medical conditions. Cancer, cholesterol, asthma, cardiovascular disease, and even depression can disrupt your premium rates drastically. Anything that is indicative of a history of ill health will be detrimental to your insurance premium. The assessor will investigate your family history too, because certain ailments like diabetes and Thalassemia have been known to pass on through hereditary or genetic means.
- Driving records. An individual’s driving record is taken into consideration when calculating life insurance rates. If the individual in question has a propensity of violating traffic laws, then it is assumed that he or she is a bigger risk in terms of life expectancy, and the premium will definitely reflect that. The more innocuous violations like parking tickets won’t usually affect insurance rates, but accidents and more serious offenses will.
- Profession. People with more dangerous jobs such as motor sport racers, pilots, and construction workers are more likely to meet with a fatal accident on the job. As a result, they’ll pay more. The dangers you put yourself in on a daily basis will definitely impact your insurance rates.
- Extracurricular activities. Your hobbies can also impact your insurance rates. If you enjoy sky diving, bungee jumping and other recreational activities that could be deemed adventurous or dangerous, they will end up costing you.
If you can change or improve any of these primary factors, you could get better life insurance rate quotes. And if you shop for your policy at a company that offers competitive rates from multiple top-rated carriers, like AccuQuote, the odds will be in your favor to get the life insurance coverage that best suits your lifestyle.