Thinking about buying life insurance soon? Trying to maximize your coverage while limiting your costs? Fortunately, a wide range of policies are available to fit any budget. You may find that a term policy is the best option for you. Or you may decide you want a permanent policy that provides lifelong protection and cash value accumulation.

The type of policy is only one of several factors that influence your premium amount. Your age is another important factor. The older you are, the closer you are to the end of your life. It may be a morbid thought, but life insurers consider your life expectancy when determining your rates. Generally, you can minimize your life insurance premiums by purchasing your policy at a younger age.

The other important factor in your premium amount is your health at the time of purchase. Life insurers use a process called underwriting to gauge your health and how it may impact your life expectancy. They then assign a health rating and use it in your premium calculation. A better health rating leads to a lower premium.Below are a few common questions about life insurance ratings and how they could affect your coverage and premium amount. Your financial professional can also help you choose the right policy for your needs and budget.

What are life insurance health ratings?

Life insurance companies usually have a set of ratings groups. Although the names of these groups vary by insurer, they’re commonly referred to as things like “preferred” or “standard.” It’s not unusual for an insurer to have five or more different classifications.

The healthier you are, the better your classification and the lower your premium. For instance, if you’re extremely healthy relative to others your age, you may get a “super preferred” rating, which might make you eligible for the lowest possible premium on your policy. On the other hand, if you have substantial health issues, you may get a standard rating or below, which would increase your premium.

How does a life insurance company rate an individual?

Life insurers use a process called underwriting to evaluate your health. During underwriting, the insurer may request a number of tests or documents related to your health. The most basic is an application or questionnaire about your health history. If you are relatively young and buying a low-dollar coverage amount, this questionnaire may be the only thing the insurer requests.

However, it’s common for insurers to also request in-person medical exams. These are usually conducted by a nurse in your home or workplace. The nurse measures your height, weight and blood pressure, and also takes blood and urine samples.

If you are older, have a history of health issues or are applying for a sizable permanent policy, the insurer may request other tests. For example, it may want you to get a full physical with your physician. It may want you to take an electrocardiogram (EKG) or stress test. Or the insurer may ask for copies of your full medical records. These requests all depend on your unique history and needs.

What can you do to get the best possible rating?

The best way to improve your rating is to take steps to improve your health as soon as possible. You may not be able to move up from standard to super preferred in a short period of time, but it could be possible to move up one classification

If you’re overweight, try eating healthier and exercising to lose a few pounds. Take steps to reduce your cholesterol and blood pressure. Smoking is a major factor in life insurance premiums. If you have enough time before you apply for coverage, consider quitting so you can be classified as a nonsmoker. That can make a significant difference in your premium amount.

 

Ready to protect yourself and your family with life insurance? Contact us today at Jim Lee Financial. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

 

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

 

17962 – 2018/9/4