Life insurance should play a
significant role in the big picture when preparing for the
future. The right coverage and some wise assistance from
knowledgeable insurance agents can make setting your family up
for the future relatively painless.
The Anatomy of a Life
Life insurers often ask detailed
questions that will help them determine risk when you apply for
insurance coverage. This aids in setting an accurate quote,
based on the evnt of death while the policy is in effect.
Some information that may be
- • Age: The younger the
applicant, the cheaper the plan.
- • Gender: Women often live
longer than men, so they pay less for the same or similar
- • Smoking habits: Rates for
non-smokers run significantly less than for smokers.
- • Weight: In shape or average
sized individuals pay less than overweight or obese
- • Family history: The healthier
your immediate family, the greater the likelihood you'll
- • Current medical history: If
you have no major maladies, you'll pay less than others
who've contracted illnesses.
- • Driving record: Applicants
with good driving records are generally healthier and pay
lower premiums than those with tickets or accidents.
- • Occupation: The more risky the
job, the greater the chance of claims and higher quotes.
- • Hobbies: Dangerous hobbies
translate into higher premiums.
- • Travel plans: Traveling into
dangerous regions ups the likelihood of death and the
incidence of insurance claims.
- • Credit history: The better
your credit rating, the more responsible and stable you tend
Grouping Based on Risk
Though most of these factors are
self-explanatory, some people wonder why an insurer would
require this kind of personal information when calculating
Here's why: gathering information
on applicants regarding lifestyle, history and vital statistics
enables the insurer to group like people together based on risk,
then associate a general premium cost for each group as a whole.
Called rate or health
classifications, applicants usually fall into one of the
- 1. Preferred Best or Super
Preferred: Take no medications, proportionate height and
weight, no major health issues, clean credit and a stellar
- 2. Preferred: In good shape
physically, but may be on a medication or two. May be
slightly overweight, but other risk factors are minor.
- 3. Standard Plus: Slightly above
average health wise, but may have some adverse family
history, or may have quit smoking recently.
- 4. Standard: Average. Most of
those with weight issues are classified standard, as are
those who quit smoking less than three to five years ago.
- 5. Preferred Tobacco/Standard
Tobacco: All smokers are placed in this category, no matter
how healthy otherwise.
- 6. Table Ratings: Those not
qualifying for a more favorable quote. Includes people with
diabetes, cancer, obesity and other serious illnesses. The
lower the table rating, the higher the insurance quote.
Generally, the lower the group's
overall risk, the lower the quote.
For the cheapest quote, stay
healthy, reduce risk, and buy the right life insurance plan
today. It makes a great addition to financial portfolios, and
helps ensure the successful future loved ones need.