Other Factors That Determine Your Life Insurance Coverage

(Deciding to purchase life insurance is an important and noble decision.)

Noble may seem like an over-the-top description but if you consider that you are paying towards the financial protection of your family without receiving anything in return for yourself, noble is a fitting depiction.

Now that you are going to apply for life insurance, you will probably wonder what determines a certain rate. The younger and healthier you are, the cheaper your coverage will be.

The article, "Factors that Affect Your Rate or Health Class" posted on matrixdirect.com explains other factors determine if you will even receive coverage and if so, what kind of rate will you receive.

"When you apply for life insurance, the carrier considers a host of factors to determine how much your premium will be. Once these factors have been evaluated, you are assigned a rate or health class."

Rates will depend on different lenders requirements but they all use sophisticated techniques, specialists and statistics to help determine the level of risk a policy holder will represent.

"The basic question: How likely are you to die during the term you are covered?"

One of first things an insurance company will look at is your blood pressure rating. High blood pressure represents that your heart is working, pumping harder than it should, and thus presenting possibly fatal health risks.

Another thing that bears weight on the evaluating process is your cholesterol level.

"If you have high cholesterol, you are at increased risk for stroke, coronary heart disease (which can lead to a heart attack) and other adverse medical conditions."

High cholesterol means that there is too much in you blood stream and it cannot dissolve itself. Since there are no traditional systems for high cholesterol, regular doctor's visits are suggested.

Your family's medical history can also greatly influence what rate an insurance carrier will assign you. These risk factors fall into two categories: modifiable and non-modifiable.

"A modifiable risk factor is something that might be controlled by diet, exercise or medication. A non-modifiable risk factor can include your family's medical history."

Non-modifiable risks make you a tougher person to insure.

Hazardous Activities and exotic travel could cause your rate to increase. Bungee jumping, scuba diving and skydiving will automatically place you in a higher rate or health class. Certain occupations such as flying a helicopter or driving a racecar are also significant health risks.

"In general, if you have an occupation with an element of risk or participate in thrill-seeking hobbies, you might not qualify for a preferred rate and will be placed in a higher rate class - even if you are healthy."

Other factors such as credit and driving record determine your rate class. The worse your credit, the lower chance you will repay the lender, which means you will not be protected.

The last thing that is important to remember about applying for life insurance is to not lie on your application. If you suddenly die flying an airplane and you never stated that you were a pilot, you risk having the policy revoked, denying your family the financial security they will desperately need.



Back to Articles