When searching out insurance providers, it always helps to have some knowledge in your pocket. When you purchase life insurance, your premiums are based on a number of different factors, and when it comes to breaking down cost it can be really tough to get a real sense of why your rate is what it is. In an effort to help you navigate this confusion we thought we’d provide a breakdown of the most common factors that impact health and life insurance coverage.
Age: The older you are, the more you will pay – this is just a fact of life, based simply on the fact that when you are young you are less likely to pass away. This is why it is important for younger individuals to purchase life insurance early.
Current Health: Some companies nowadays promise coverage without a medical exam, but others require it as a precursor to providing coverage. Why? This exam checks for any health concerns that may signal future problems (high blood pressure for example). Weight is also part of this – if you are overweight this may become problematic (if it isn’t already). Any negative aspects will lead to higher rates.
Gender: Gender equality is important, but when it comes to insurance your gender does play a role with regard to life expectancy. Typically, women live longer than men, and so women usually pay lower rates.
Health and Family History: Any history of disease, chronic illness, or other potential health problems either in your own health history or your family health history, is perceived as a risk factor, and will thereby increase rates.
Smoking or Drinking Habits: It is a well-known fact that these can contribute to less than ideal health, so if you smoke or are a heavy drinker, expect to pay a little more.
Occupation: Again, it is all about risk here. If you skydive for a living your rates are likely going to be a bit higher than someone who sits behind a desk all day.
The Policy Itself: Every policy is different, and so it is important to know what you want and need as far as insurance, as well as how this will impact rates overall. Make sure you discuss all of your options, including the term, the amount of the death benefit, and the type of insurance, with your insurance advisor before you decide which policy is right for you.
An easy way to remember these things is by thinking about risk overall. An insurance company needs to evaluate risk and so if something seems risky, you are probably going to pay more.
For more about the factors that impact health and life insurance coverage please contact Independent Financial Concepts Group today by calling 1-416-849-1653 or visit www.wecoveryou.ca.