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Most individuals are not fully aware of the criteria insurance companies use to charge premiums or to assess relevant risk factors. Therefore, they may not realize that among the various factors considered, insurance providers will take into account your lifestyle when assessing your premium rate. This means that some of your bad habits may come back to haunt you – in the form of higher annual premiums!
Physical Health One of the main lifestyle factors for insurance companies is a policy holder’s physical health. Prospective insurers will want to know if you smoke, if you have any medical conditions such as heart disease, high blood pressure, diabetes or high cholesterol and if you are overweight. Any of the above conditions can result in a dramatic increase to your annual life insurance premiums. The reason is that they make you a higher risk to an insurance company. The worse your physical condition, the higher probability that you will die early. This is why insurance companies require policy holders to undergo a thorough medical examination to determine if they are eligible for life insurance coverage. Alcohol Abuse Even drinking too many alcoholic beverages can affect the cost of your annual insurance premiums. Obviously, insurance companies are unable to determine the exact amount a policy holder drinks. However, they will require you to undergo a medical examination that includes a liver function test. This will reveal if you have a high level of particular liver enzymes that can indicate liver damage caused by alcohol abuse. Therefore, you may want to reduce the number of drinks you have at the pub each week if you want to lower your life insurance premiums. Mental Health You are probably already aware that your physical health can affect your life insurance rates, but did you know that your mental health can as well? Because certain mental illnesses such as depression represent a higher suicide risk, insurance companies will usually increase the rates for anyone diagnosed with such a condition. However, it’s important to note that not every type of mental illness will affect insurance rates. Other factors such as the possibility of managing the illness, length of time since a policy holder has been diagnosed and long-term treatment options are also considered. Recreational Activities & Employment You will normally pay higher premiums if you are employed at any type of dangerous job. This also applies if you engage in any type of recreational activities or enjoy hobbies that are classified as dangerous; these can include anything from mountain climbing to sky diving. Each insurance company offers their own definition of a “high-risk” policy holder, so you should inquire with any prospective insurers beforehand to see if you fall into this category. Driving History Insurance companies will also review your driving history. Policy holders with a clean driving record almost always pay less for life insurance than individuals who have a poor driving history. If you have been involved in multiple accidents, obtained traffic citations or amassed speeding tickets, you may face higher life insurance premiums. The Effect of Changing Your Lifestyle If you are one of the many individuals who fall into one of the aforementioned high-risk categories, don’t get discouraged. You may be able to reduce the rate of your annual life insurance premiums by simply adopting some lifestyle changes. For example, you can lose some of that extra weight, reduce the number of alcoholic beverages you consume or quit smoking. Your insurance company will require you to prove that you have maintained this lifestyle change; therefore, you may need to undergo another medical examination after a specified time period. Depending on the results, you may qualify for a lower life insurance rate. |
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