Feb 6, 2017
Life insurance is one of those things that you would really rather not think about. After all, it can be scary to deal with the fact that your family may need to use its payout one day. But just because it is unpleasant to consider and requires some time to purchase a policy doesn’t mean you shouldn’t get it done in order to protect those you love.
Intended to provide income for your loved ones should you pass away, the monetary benefits of life insurance can be used to pay funeral costs (which can be multiple thousands of dollars), clear your outstanding debts (including medical bills and credit cards), pay off your mortgage, and cover everyday living expenses for an extended amount of time.
There is simply no better way you can take care of your family than to provide for them, even after your death.
There are, however, five factors that may influence the type of life insurance policy you can purchase and how much coverage will cost you.
Even though you have no control over how many birthdays you have had, your age can be a major factor in the price of your premiums. As you get older, your risk of dying goes up. For this reason it is very prudent to get life insurance as soon as you are financially able.
After age, gender is the biggest determinant of life insurance policy pricing. On average, women live five years longer and have regular check-ups more often than men. These two factors usually allow females to have slightly lower rates.
Physical Exam Results
During your application process, an insurance agent will come to your house and perform a quick medical exam to determine your body mass index, blood pressure, cholesterol, and liver enzyme levels among other things. They will also ask you a series of questions regarding your mental health (depression, overstressed, etc.). This is done to determine your physical and mental health over the previous ten years. Also, you will likely have your prescriptions checked.
Tobacco, Alcohol, and Drug Use
If you use cigarettes or e-cigs, you put yourself not only at risk for a myriad of health ailments but for higher life insurance costs as well.
Heavy alcohol use will also put you in the high-risk category for coverage.
During your physical exam, you may have your blood or urine tested for drug use. Insurance companies have varied opinions on the use of recreational marijuana but most tend to group its use in with nicotine cigarettes. If you have a prescription for medical marijuana, the insurer may consider you to have a serious illness (AIDs, cancer, etc.) and your cost for life insurance can go up considerably.
Family Medical History
Diabetes, cancer, or cardiovascular issues of your parents or siblings can negatively affect your insurance rates, unfortunately.
If you are a pilot, miner, firefighter, or in law enforcement or the armed guards then you might pay more than someone who works a desk job.
Some activities are considered high-risk and might raise a red flag to insurers. Here are some examples of risky hobbies:
Traveling to third-world countries or warzones
Sky or scuba diving
Rodeo or circus performing
Generally, your credit history isn’t a factor in a quote for life insurance but some underwriters won’t offer you term life insurance until your bankruptcy has been discharged for two to five years.
Any DUIs or traffic accidents on your driving record will probably cause you to be considered high risk and your premiums will rise to reflect it.
Depending on the insurance company, your criminal record can be checked before a policy will be written. You may not qualify for coverage if you have a recent conviction.
Short-term (10 years) life insurance is the least expensive option with long-term policies (30 years) next on the price scale and permanent (or whole) life insurance costing the most.
The amount of payout benefit determines the price of your premium. For example, a death benefit of $25,000 will cost much less than one of $1,000,000.
If all of this feels a little overwhelming to you, don’t worry. Our staff will help you wade through all the information and details to get you the correct coverage for the right price.
Contact Insurance Center Associates today for more information!
1622 S. Gaffey #104
San Pedro, CA 90731
C & S Insurance
3220 Sepulveda Blvd #202
Torrance, CA 90505