To cut the cost of your life insurance, you may want to know what major factors affect the calculation of your premium. The major factors can be categorized into four groups: age, gender, use of tobacco and health history or pre-existing conditions.
Your age. Young people are usually offered a lower rate than older ones. Therefore you may consider purchasing your own life insurance as early as possible, especially when you begin new family or start full-time job.
Gender. Even though some states require the same rate for both sexes, gender is still one of the concerns as actuarial data shows that women live longer than men on average.
Use of tobacco. Smoking history can severely raise your rates. Smokers usually pay a much higher premium than non-smokers. Even if you just smoke a few cigarettes a day or only smoke occasionally, the insurance company will put you in their smoker category and charge you more. Quit smoking is not only good for you health, but also good for your wallet.
Being alcoholic. If you have been drinking heavily for years, or once an alcoholic in the past, you may be facing a higher rate. Insurance companies see alcohol addiction as very destructive to your health and will charge you more premiums to compensate for the risk.
Medical conditions and inherited illness. Your medical records can cause your rates to hike up. For example, having diabetes risks not being able to live up to assumed age, and therefore will increase the rates for compensation of the risk.
Even if you do not suffer from pre-existing conditions or health problems, your family’s illness history may still affect your premium and rates because some diseases tend to pass on along generations. You should be genuine about your family’s medical history. If you try to hide any illness and it is later discovered, your policy may end up void.
Obesity. Avoiding junk food and working out not only make you look better, live healthier, but also can save you money. Obese people can be asked to pay as much as 50 percent more rates for life insurance premium. This is because insurance companies believe that excessive body weight is associated with higher risk of having diseases such as diabetes and heart attacks. If you are already insured but have lost a substantial amount of weight, you can update your insurance company on your improvement. If you provide medical exam results that confirm your change, they may consider lowering your rates.
Other factors. There are other factors that may affect your premiums and rates. For example, some jobs are considered riskier than others and therefore may lead to higher premiums. So you want to inform your insurer of changes in your careers, especially when you switch to a safer job.
Based on the factors that affect your premium, you can try the strategies below to trim the cost.
Buy life insurance as early as you can, especially while you’re young and healthy, but not until you have dependents.
Don’t smoke. Think about the costs (in addition to the cost/pack) associated every time you want to light one up!
Maintain good health and take care of yourself. Exercise regularly and eat a healthy and well-balanced diet. Limit alcohol consumption, do exercise, and watch your weight. Not only would you receive a lower premium, you would feel better about yourself.
Don’t eat for 12 hours or more before your medical exam. Life insurance companies will require you to take a medical exam, and some exams require a blood test. Hence, for accurate blood test results, don’t eat for 12 hours or more before the test.
Group insurance plans offered by employers usually offer very low rates. Employees are often eligible for these group plans regardless of health. Family riders that allow you to add a spouse or children may also be available, and these can be added to your group insurance plan at a very low cost. So, take advantage.
Keep in mind that, many of the factors are under your own control. Trying to live healthy can save you a lot of money.
