When you think about it, life insurance is a bet between you and the life insurance company.
You’re betting that you’ll die during the term of your policy.
While the life insurer takes that bet, hoping you’ll outlive your policy.
The insurer wins, they keep your premiums….but you live.
You win, the insurer pays out your claim…but you die.
That’s A BIT FREAKY isn’t it?
Like any bookmaker, the insurer must estimate the chance of a payout before deciding how much you pay in premiums (the odds)
So how does the insurance company calculate the odds of your policy paying out?
By looking at the following 5 factors.
The risk of a death claim increases with age (as you shuffle ever closer to death’s door)
This risk is assessed by looking at mortality rates showing the number of people that die each year in your age group.
At thirty, you have a very low probability of dying = cheaper premiums
This increases substantially when you hit forty = premiums get higher…
How to beat the house : If you’re thinking of taking out life cover, do it today. Hand on heart, I can say you’ll never be younger.
Everyone knows smoking is one of the most serious health risks around.
You’ve seen the ads, 1 in 2 smokers will die of a smoking related disease.
If you’re a smoker, you’ll pay around twice as much as a non-smoker.
How to beat the house : QUIT!
Yeah I know, easier said that done but once you’re a non smoker for over 12 months you’ll get non smoker rates.
P.S. I recommend this Allen Carr book – it got me off the auld coffin nails
The health questionnaire in a life insurance application form is
long and boring comprehensive.
The insurer will ask about weight, cholesterol levels, blood pressure and many other health issues.
Your current health and any past medical issues may result in a loading that will increase your premium.
How to beat the house : Lose weight, sort out your BP and cholesterol. Once they are in a normal range, you will get a lower premium.
Further reading – How to Pass a Medical Exam
Some jobs are riskier than others.
If you’re a fireman, you’re statistically more likely to die than if you are a shop assistant.
And because of this you might face a higher premium.
How to beat the house : Apart from changing jobs, you’re stuck with this risk factor
If your premium has been increased due to occupation, it is worth shopping around as another insurer may not see your occupation as so risky.
As outlined above, as part of the life insurance application, the insurer will ask about weight, cholesterol levels etc but also about the health of your parents and brothers and sisters.
A history of health issues in your immediate family could result in a premium increase (or an exclusion from making a claim on related illnesses)
How to beat the house – Disown your family?
Again, I’m afraid you’re stuck when it comes to family history but it pays to speak to all of the insurers. Some may penalise you for a certain hereditary condition while another will offer you the standard price.
It can be time consuming speaking to all 6 insurers.
If you have time – have at it…
If not, let me know and I’ll find your perfect insurer saving you time, money and hassle.
Simply complete the quick outline form below and I’ll be right back.
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