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The Life Insurance Blog

Helping millions of Americans become educated
in making decisions about their life insurance needs


Life Insurance & Your Health: Here's the Connection

Jul 9, 2016 9:30:00 AM

You're undoubtedly familiar with all of the benefits and advantages of staying healthy - from more energy to stronger muscles to improved moods. And you've also heard all the admonitions about failing to maintain good health - from sleep apnea to a weaker immune system to higher health care costs.

But here's a fact that you might not be familiar with: your overall health (or lack thereof) has a significant impact on how much you pay for life insurance.


Life insurance

Consider this a roadmap to paying HIGHER life insurance premiums.

Healthy Lifestyle = Lower Life Insurance Premiums

To learn why, let's begin by understanding how life insurance providers establish premiums for their customers. These insurers take a similar approach to stratifying their policyholders as the one embraced by auto insurance companies. With car insurance rates, the lowest premiums are reserved for excellent drivers (those with spotless records), costlier premiums are assigned to average drivers (those with one or two tickets or collisions), and the highest premiums are allotted to poor drivers (those with several accidents/infractions or a DUI).

Likewise, life insurers tend to divide policyholder rates into three groups: standard rates, preferred rates, and super-preferred rates. Though the classification names may differ, companies generally give standard rates to people in average health, preferred rates to individuals in good health, and super-preferred rates to customers in excellent health.

What Does "Healthy" Mean?

So what criteria are used to determine how healthy a potential policyholder is? Some of them are completely beyond our control, such as age and family history of heart disease, cancer, and other illnesses. But many factors can be altered, including diet, amount of exercise, and participation in (or avoidance of) certain activities, habits, and behaviors.

Regarding the latter category, life insurance companies aren't necessarily concerned with specific details about customers' lifestyles, like how much fruits and vegetables they eat, what vitamins they take, or what types of exercise they prefer. The insurers are more concerned with how those life choices impact the end result of people's health status.

However, life insurance providers will take into account lifestyle factors that tend to increase the chances of dying. These may include working in a dangerous occupation such as construction, engaging in risky behaviors such as skydiving or recreational drug use, or engaging in unhealthy habits - such as smoking.

In fact, smoking is probably the single most substantial factor in calculating life insurance premiums. It's so important that insurers often have a fourth rate category just for people who smoke. A recent NerdWallet survey found that smokers tend to be stuck with premiums that are twice as high as those paid by their non-smoking peers.

Life Insurers Will Check Your Health

Because a person's health is relevant to the cost of a life insurance policy, insurers usually require potential customers to undergo a health screening before they sign up for a policy. These exams look at basic criteria like blood pressure, cholesterol counts, and body mass index. Such screenings help insurance companies place their customers into rate categories.

In extreme cases, the insurer might decline to offer coverage at all. Some companies do offer life insurance with no medical exam required, though the premiums tend to be higher than those for typical policies. So if you think your health is unsatisfactory enough to qualify for standard life insurance, a "no medical exam" policy might be a good option.

Don't Put Off Getting Life Insurance Coverage

The bottom line is that life insurance companies are trying to predict your life expectancy and whether or not you are likely to die within the next several years - and they compute your policy premiums accordingly. This means that younger people will typically pay lower premiums than people in higher age brackets.

Therefore, it's wise to avoid procrastinating when enrolling in life insurance coverage. And unless you think that your overall health will significantly improve in the next year or so (for example, by quitting smoking or completing a weight loss program), then you should probably enroll in coverage as soon as possible in order to avoid paying higher premiums as you get older.


Life insurance

You've got big dreams for your life. So you'd better get life insurance while you're young.

Though life insurance providers operate similarly, that doesn't mean that they all charge the same rate for the same policy. That's why when considering the purchase of life insurance coverage, it pays to comparison shop.

IntelliQuote can provide you with price quotes from several insurers so you can compare life insurance policies side by side and find the option that best suits your needs. So visit the IntelliQuote site today - and here's to good health and long life!