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Not-So-Secret Factors That Affect Your Life Insurance Rates

By Byron Udell | December 31, 2013

Have you ever wondered why insurers boost your insurance rates? What exact personal information do insurance companies look for and say, here’s a risk, this person is likely to make a claim, so let’s increase his/her insurance premiums to compensate our potential losses. You could save some money by making a few changes to qualify for the best rates by keeping in mind the following factors:

Your Life Insurance Rates May Be Impacted By…

Driving violations – Have you had more than two moving violations in the past 3 years or a DUI in the past in the past 5 years?  That’s enough to make most insurers raise your premiums.  Bad driving puts your life in danger, posing more risk for insurers. But unlike, bankruptcy, don’t wait to have your driving violations dismissed from your record before buying a life insurance policy. Leaving your loved ones without a policy is a greater risk and one that you won’t want to gamble on.

Your weight – What is significant to underwriters is the number of diseases related to being overweight that could shorten your life span. Height, weight and body mass index (BMI) have always been important factors when calculating individual insurance rates but the standards to assess health are shifting.  “In 1994 a man who was 6 feet tall could have weighed up to 260 pounds and still qualified for relatively low rates, says Byron Udell, CEO and Founder of AccuQuote on Kiplinger, “Now, a 6-foot-tall applicant must weigh no more than 200 to 205 pounds to be eligible for the best rates.”

And even if you do lose weight, don’t be too quick to apply for lower premiums. Most insurers want to see you keep that weight off for at least one year before they roll out the best premium rates for you.

Family health history – Has a close family member died from cancer or any other type of hereditary disease before the age of 60? Your family medical history shows insurers what diseases run through your family, even lifestyle diseases that may pose a threat to you living a long, healthy life. Some insurers will hike your rates even if your relative did not actually die from such diseases.

Your workplace colleagues – If you’ve got group life insurance from your workplace, your premiums are based on the average health and age of your colleagues. If it’s a healthy group in their early 30s, you’re probably enjoying a good rate from your workplace insurance. On the other hand, if most of your colleagues are in their mid-40s and 50s, suffering from diabetes or age-related health problems, there’s a good chance you’re paying more than you should. Find out how much it would cost you to buy an individual policy for yourself.

Credit history – Your credit history reveals a lot about your spending habits but what life insurance companies are interested in is whether you’ve filed for bankruptcy. If you do have bankruptcy displayed on your credit report you should avoid buying a policy until your bankruptcy has been entirely discharged. Those who have filed for bankruptcy, particularly in the recent past, are considered a high-risk proposition. There are a few carriers who may offer you a 10-year term policy, but with extreme caution and the rates may be incredibly high. However, once your credit report has been cleared of bankruptcy, you can qualify for lower premiums so be sure to ask your insurer to re-evaluate your rates at that time.

Hobbies – Hobbies like skydiving, hang gliding, car racing, rodeo riding and even some types of scuba diving can disqualify you from getting best-rate life insurance. Even a trip overseas to dangerous or adventurous places can diminish your chances of qualifying for better rates.

Each insurance company has their own set of underwriting rules. This means that some companies will give some factors a heavier weight than others. So a good way to save money is by taking advantage of these little nuances in insurance underwriting. Look at insurance quotes from as many companies as you can before you make the final decision. AccuQuote will help you find the best life insurance quotes from the country’s highly rated insurance companies.

We only work with highly rated insurance companies – brand names you trust. You may be able to save money without sacrificing quality and strength.