8 Risk Factors That Life Insurance Underwriters Consider

If you have taken an insurance cover before, you understand that specific aspects influence your coverage. Before taking any insurance products, you must undergo an assessment procedure usually referred to as the underwriting process. Insurance underwriting is an individualized procedure in which insurance agencies acquire more details before covering you. The risk factors differ from one firm to the other.

Here are the eight risk factors that life insurance underwriters typically consider.

Age

Age is one of the most significant aspects that determine your insurance coverage in that your insurance premium increases with age. If you are younger, you will acquire more affordable insurance premiums than older individuals. You are likely to live longer than your insurance term compared with older people.

Additionally, as a young person, you are more likely to make more payments on your insurance premium before dying. Old age also enhances the risk of developing chronic health conditions, which significantly affect your premium rate or inhibit you from being insured. Nevertheless, if you’re older, your insurance agent may use a final expense quoters list to determine coverage.

Medical History

Besides your age, your health condition is one of the significant aspects of determining your premium. Being healthier reduces the chances of dying from a health condition. As a result, you can get a reduced insurance premium. You may be required to undergo a medical analysis that establishes aspects such as prescription drug utilization, use of nicotine, and a report of your past health conditions.

The insurance firm also determines if you suffer from chronic diseases such as high blood pressure and respiratory issues. Such aspects affect the cost of your insurance cover. If you suffer from a health concern, it would be best to apply for guaranteed or simplified issue insurance.

Occupation

Certain jobs are termed high risk, thus reducing life expectancy. They are termed hazardous because they contain high risks of accidents or unhealthy working conditions such as construction work. Insurance companies typically have professional manuals that include an increased risk of mortality. Therefore, you have a higher chance of getting an increased premium if you work in any of them.

If you change your job after purchasing a higher insurance premium, you may ask your insurance provider to consider shifting you to an insurance cover with a better rate.

Sex

The life expectancy for females is longer than for males. Therefore, sex plays a role in determining the price of premiums.

Family Health History

Even if you are not suffering from a health issue, your family health report can offer health details on certain hereditary health conditions. For instance, if there is a high blood pressure history in your family, you have an increased rate of suffering from a heart condition. Such health issues in your family determine your insurance premium rate due to the likelihood of developing health conditions afterward.

Hobbies

Hobbies are also another aspect that insurance companies consider. For instance, you are more likely to pay a higher premium if you enjoy activities such as skydiving, car racing, rock climbing, deep-sea diving, or plane flying. The riskier your hobby is, the higher the premium you will pay.

Lifestyle

Insurance companies also look at certain aspects of your lifestyle before issuing an insurance cover. Such factors influence your safety and health, such as criminal, financial, driving, and foreign travel records. Therefore, if you have a consistent pattern of risky behaviors, it may affect your premium rate.

Tobacco Use and Smoking

If you use tobacco, smoke, or use vape, you will likely pay a higher insurance premium than non-users. It also includes any recreational or occasional use of marijuana. Even though most insurance companies are more considerable with marijuana users, it is still likely to affect your premium rate. Interestingly, your rate may lower if you stop smoking after a year.

The Bottom Line

Regardless of the insurance coverage you decide to purchase, your application provides information in determining your eligibility and premium rate.

The above aspects and many others influence your premium rate, which differs from one insurance company to the other. Therefore, it is significant to research to establish a suitable insurance company for your needs.