Most people are aware of the obvious factors that affect life insurance rates, such as age, health and how much you smoke. However, there are some lesser-known factors that also affect how much you pay for your policy. If you want to get the best deal, it’s important to know these secret factors. Here are five things you may not know that could change the cost of your life insurance.
1. Your Record as a Driver:
Poor driving can increase your car insurance rates, but not many people know that it can also increase your life insurance rates. Insurance companies look at your driving record to determine how much risk you run. Frequent speeding, drunk driving and other traffic violations can be signs of risky behavior, which can mean a higher risk of premature death. If a life insurer considers you a higher risk, they may charge you higher fees to compensate.
2. Lifestyle Interests and Choices:
Your hobbies may bring you pleasure and help you relax, but they can be a warning sign for insurance companies. If you engage in dangerous activities such as flying, mountain climbing or diving, your life insurance rates can increase or decrease significantly. Insurance companies may charge higher rates or even deny coverage for accidents that occur while they are doing these things. If you do want to jump out of a plane or dive into the deep ocean, be prepared for potentially higher insurance costs.
3. What is Your Credit Status?
It’s not always used, but in some places, your credit score can affect how much you pay for life insurance. Some insurance companies consider a low credit score as a sign of poor money management, which could mean the person is at greater risk. That’s because research shows that people who are bad at managing money can also be bad at taking care of their health. If you have a bad credit score, you may have to pay more for life insurance.
4. Family Medical History:
Even if you are in good health, your family’s health background can have a significant impact on your life insurance rates. If your family has a history of cancer, heart disease, or other serious diseases inherited in your genes, your insurance company may believe that you are more likely to develop these conditions. This doesn’t mean you will definitely pay more, but it is something insurance companies will take into account when reviewing your claim.
5. What are You Doing?
How you earn a living can have a significant impact on the amount of life insurance you pay. Higher premiums may be charged for jobs with significant physical hazards, such as construction, firefighting or industrial fishing. Insurance companies believe that these jobs carry a higher risk of fatal accidents, which means they take a greater risk in insuring your life. If your job puts you at risk, this could be reflected in your life insurance premiums.
How to Avoid These Things:
Understanding these things can help you make a more informed choice about your life insurance policy. Here are some ideas:
Maintain a Good Driving Record: Not only can this help you get lower car insurance rates, it can also help you pay less for life insurance.
Look at Your Hobbies: Consider how your leisure hobbies could affect your insurance rates. As you shop around, you’ll notice that some insurance companies offer special plans for high-risk hobbies.
Improve Your Credit Score: If you can, working on improving your credit score can help you get better deals on loans, credit cards, and even life insurance.
Talk About Your Family History: Tell your insurance company about your family’s medical background. Some insurance companies may offer you better insurance rates than others, especially if you live a healthy life, even if you have had health problems in your family in the past.
Review Job-Related Risks: Look at the risks your job entails. If you work in a dangerous job, look for an insurance company that specializes in or understands higher-risk jobs.
Conclusion:
Understanding these five lesser-known factors can help you get rates and coverage options that better suit your needs. Remember, the best way to find the best life insurance policy is to do a lot of research and be honest. By keeping these unexpected things in mind, you’ll be better prepared to discuss your life insurance policy and get the coverage you need without breaking your budget.
FAQs:
1. Why does the way I drive affect my life insurance premium?
Your driver’s license affects your life insurance rates because it tells the insurance company how risky you are while driving. Having a traffic violation or accident in the past is a sign of a risky lifestyle, which is associated with a shorter lifespan and a greater chance of filing a claim early.
2. How Much Do Dangerous Habits Affect Life Insurance Rates?
Depending on the type of activity and the frequency of the activity, participation in high-risk sports can have a significant impact on your life insurance rates. Some hobbies, such as skydiving, rock climbing, or bungee jumping, may be considered high risk by insurance companies. This could mean that your premiums will increase or that your policy will not cover something.
3. Will my life insurance rates really drop if I improve my credit score?
If you live in a place where credit scores are used to determine risk, improving your credit score can help lower your life insurance rates. A higher credit score is often seen as a sign of responsible behavior, such as better health management, which can help you get better insurance terms.
4. What should I do if I have a disease that runs in my family and is bad for my health? Does this always lead to higher life insurance rates?
If someone in your family has had a serious illness, it may make the insurance company suspicious, but that doesn’t always mean your premiums will go up. Factors such as your health, lifestyle, age, and medical advances are also taken into account when treating these conditions. Some insurance companies may offer you favorable rates if other parts of your background indicate that you are a lower risk.
5. Can I still get cheap life insurance if I work in a dangerous job?
Yes, you can still get cheap life insurance even if you have a dangerous job. Some insurance companies specialize in or offer plans specifically for high-risk jobs. In addition, if you show that you take extra safety measures or that your work reduces risks, you can get a lower rate.
