How your Lifestyle affects your Life Insurance

By Compuquotes Team on March 27th, 2008

Insurance companies operate and make money by assessing risk and charging premiums based on the amount of risk involved in the lifestyles of their policy holders. There are several lifestyle factors that affect how much you pay in premiums.

Physical and Mental Health

One of the biggest factors in play is your physical health. Are you a smoker? Are you overweight? Do you have a medical condition such as diabetes, high blood pressure or cholesterol, or heart disease? All of those things can increase premiums considerably, because they reduce average life-span and make it more likely that a policy-holder will die early. And the medical examination that you must take to be accepted for life insurance coverage will show whether or not you're affected by any of these health conditions.

Excessive alcohol use can also affect your premiums. While there is no way for an insurance company to determine how much an individual drinks, the medical examination that is required as part of the application process includes liver function tests-and increased levels of certain liver enzymes are an indicator of alcohol-related liver damage.

While physical health as a risk factor is widely known and understood, many people do not realize that mental health also plays a role in determining insurance premiums. Insurance companies consider that those with certain types of mental illness such as depression are at higher risk of committing suicide, and therefore insurance premiums are likely to be increased for such individuals. Not all mental illnesses are viewed this way-factors such as the length of time the illness has been diagnosed, and whether or not long-term treatment and management is possible affect the risk level.

Employment and Hobbies

If you're employed in a hazardous job, or if you have a hobby that's considered dangerous, such as sky-diving or mountain-climbing, then your premiums are likely to be higher. The definition of high-risk varies so it's best to ask potential insurers before you make a decision on where to buy life insurance.

Miscellaneous Factors

Other factors such as your driving record come into play, too. Many insurance companies review the driving records of those who apply for insurance, and speeding tickets or other citations can mean increased premiums. And if you're a frequent flyer you should be prepared to pay more, too.

Changing your Lifestyle to Reduce your Premiums

If you have a high-risk lifestyle, it's often possible to take steps to remedy any problems and get your premiums lowered. If you're overweight or a smoker, quitting or losing weight-and maintaining that new status-will mean a reduction in your life insurance costs. If you make improvements in your health that might reduce your premiums, you will be required to undergo a medical examination so that you can prove your new lifestyle is lower risk. You'll also need to be able to prove that you can maintain your lower-risk lifestyle-usually this means that you must maintain the new lifestyle for a certain amount of time before being eligible for a premium reduction.

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