Almost all insurance companies will base customers’ premiums on factors called risks. Life insurance companies will use risk factors to set rates as well. So, if factors in your life pose higher risks to the insurer, then you might pay more for your life insurance. Why is this? What can you do to improve your health and possibly qualify for lower rates?
What is a life insurance risk?
In the insurance world, a risk is the likelihood that an insurable event will occur. An insurable even is one that will trigger a claim (and payout) on a policy.
Life insurance will pay should the insured person dies. So, to determine risk, the insurer will weigh factors influencing the insured’s chances of death. That helps them determine the likelihood of it happening while the policy exists. If a person has a higher risk of death, then the insurer has a higher risk of having to make a payout. As a result, the policyholder will likely have to pay more for the coverage.
Factors like the insured’s age, sex, occupation, lifestyle and medical history could all influence risk. Health, alone, is such an important risk factor, in fact, that many life insurers require applicants to undergo medical exams before they will approve them for various policies.
Why does your health play a role in this risk?
Life insurers like to know how an insured’s health measures up. This is because, perhaps obviously, health is a main factor that can influence a person’s wellness. If you have bad health, or poor habits of maintaining your health, your risk of death likely will increase. Therefore, an insurer might have to charge more for the life insurance policy.
Look at it from the perspective of conditions like heart disease, diabetes or high blood pressure. These conditions might not pose an imminent fatal risk. They might be manageable. However, over time, they can significantly impact a person’s longevity. Therefore, sufferers might have to pay more for their life insurance.
Improving Your Life Insurance Health Risks
Better health makes for a better life insurance risk measurement. With the right health self-care, you possibly could reduce your life insurance premiums. We can all take simple, but productive steps to influence our own health.
- Stop smoking. The dangers (cancer, heart and lung disease, etc.) are obvious. If you can abstain from smoking for a number of years, you might qualify for lower policy rates.
- Monitor your alcohol intake. Those who drink to excess put themselves at risk of many chronic illnesses, like cirrhosis.
- Research an appropriate diet for people of your age, weight and overall health. Your doctor or a nutritionist can help you consider your options.
- Drink ample amounts of water. Hydration is one of the pillars of health maintenance.
- Make regular exercise part of your routine. Even light exercise can balance your blood pressure, blood sugar circulation and more.
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