When you purchase a life insurance policy, the amount you’ll pay in premiums is determined by factors you control.A life insurance policy is a contract between you and a life insurance company. The insurer agrees to pay your beneficiaries a benefit if you die. The rate you pay is determined by health factors and the type of policy you choose, either term or permanent. A term policy is good for a limited time and is less expensive; a permanent policy costs more, but provides lifetime coverage.
Naturally, there are some factors you can’t control: your age and your family health history. The older you are, the higher your rates. Evidence that a close relative has a chronic disease, such as cancer, may lead to higher rates. Women usually live longer than men, so men will see a higher premium.
Fortunately, there are number of actions you can take to lower your life insurance premiums.
Being overweight is costly. Studies show that if you are 25 percent overweight, you have a 25 percent greater chance of dying at a younger age than someone who isn’t overweight. Excess weight can lead to a variety of health issues, such as high blood pressure, heart or digestive problems, high blood pressure, or diabetes.
Not only can being overweight affect the quality of your life, but life insurance companies often decline coverage or charge higher rates when someone is obese. Losing weight right before applying for insurance won’t help because the insurance company takes your weight average over 12 months. So, plan ahead!
Watch Your Sodium Intake
Insurance carriers want to know if you have high blood pressure, a condition that adds stress to your arteries and can lead to serious problems, such as heart disease and strokes.
One way to lower blood pressure is by limiting foods that are high in salt. The American Heart Association recommends no more than 2,300 milligrams of sodium per day. Choose carefully. High levels of sodium can be found in many of foods we consume daily. Three ounces of deli turkey can have 1,050 milligrams of sodium, while a whole a cheeseburger can have up to 1,690 milligrams of sodium.
Limit Alcohol Consumption
An occasional drink won’t affect your rates, but more than two drinks a day will knock you out of preferred, lower rates. Three or more daily drinks will take you out of standard rates. Insurers take this into consideration because alcohol abuse can lead to cardiovascular problems, dementia, stroke, depression, liver disease and gastrointestinal problems.
Choose a Less Dangerous Occupation
If your job has a higher than normal chance of leading to premature death, you could be denied coverage or may have to pay higher premiums. An insurance company might charge $2 more for every $1,000 of coverage. If you have a $200,000 policy, it would cost you an extra $400 annually.
Occupations falling into that category include logging and fishing. Other occupations that can lead to higher premiums are truck driving and on-the-road sales, because they expose the worker to hazardous conditions, such as falling asleep behind the wheel.
If you want to know whether your job is considered a risk, review the Bureau of Labor Statistics list of dangerous occupations. It’s the list many insurance companies use to determine risk.
Stop High-Risk Recreational Activities
Do you like to live on the edge, participating in activities like skydiving, skiing, hang gliding, rock climbing, hot air ballooning or scuba diving? Participation in risky activities could mean you will be denied coverage or be charged higher rates. Remember, not all insurers use the same list, so it pays to talk to your advisor for options.
Smoker in their 30s can expect to pay two to three times more for a policy than nonsmokers. Smokers in their 40s can expect to pay three to four times more.
Don’t omit this information on your application. Providing false information can be considered insurance fraud. Many insurance companies require a medical exam. Evidence you’re a smoker will show up on the blood and urine tests. If you manage to hide this fact, but die during the first two years of the policy, and it’s discovered you smoked, your beneficiaries could be denied the benefits.
The good news is that if you quit smoking, you can qualify for lower rates within a year. And, if you smoke cigars occasionally or chew tobacco, let your insurance company representative know. These forms of tobacco will show up on your blood test, but some insurance companies may be more lenient with these tobacco uses and may give you a non-smoker rating.
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