A number of factors are considered when a life insurance company sets a premium cost. Such factors include the customer’s age, where they live, existing health conditions, benefit amount desired and lifestyle choices. Lifestyle choices often have the most bearing on determining premium cost. Higher prices are often a probability if a client lives a riskier lifestyle. For example, individuals who participate in sky diving, scuba diving and other extreme activities will have higher premiums than those individuals who prefer playing golf or fishing in their time. Life insurance companies also look at a person’s occupation, obesity and if the client smokes. There are several ways to lower life insurance premiums. Below are five tips to help lower these costs.
1. Quit Smoking.
The simplest way to reduce life insurance costs is to avoid using tobacco products. Though this is the simplest, it certainly isn’t the easiest. Besides the many health benefits of quitting smoking, life insurance companies often charge tobacco users much more than non-users. A non- smoker, 30 year old male could pay $20.88 per month while a smoker would being paying $77 a month. Once a client quits smoking, a new application for insurance is not required. Most companies will lower cost once a person is tobacco free.
2. Lose Weight
Having an unhealthy body weight is one of the many reasons why individuals have to pay more for life insurance. Being overweight is linked to a number of diseases which can lead to early death and are considered a risk factor for insurance companies. These diseases include diabetes, heart disease, stroke and cardiovascular disorders. Typically, insurance companies will use the body mass index as a guideline even though it is a flawed system as it does not distinguish between gender or consider bone structure, body composition or ratio of muscle to fat.
3. Play it Safe When Driving
A poor driving record can cause for a person’s life insurance premium to go up as it shows that a person is careless and therefore a higher risk. Follow the speed limit, pay attention to traffic laws, look out for other drivers and have a clean driving record if you want to lower your premium costs.
4. Buy Life Insurance Early
The average life expectancy of a person in the United States is 79 years. Higher premiums are given to those individuals who are closer to this age. The younger a person buys, the lower the premium cost for the duration of the policy.
5. Choose Term Life Insurance
There are two types of life insurance: term life insurance and whole life insurance. Term life insurance is typically 10 or 20 years in duration, though some companies do offer one-year increments from three to 30 years. Most companies do not pay a death benefit with term life insurance as most policies need to be renewed more than once in a person’s life. Companies can charge less for premiums without losing profit.