Risks to Consider when Completing Life Insurance Applications

You may think your physical health is the main criteria when applying for life insurance, but a number of other factors could raise your premiums.

Life insurance companies try to identify people who are at high risk for death. And some of the ways they do so are obvious. For example, most insurance companies first divide people into smokers and nonsmokers.

But it doesn’t stop there. Life insurance companies then further subdivide both smokers and nonsmokers into three risk categories: from lowest risk to highest, these categories are often called Preferred Plus, Preferred, and Standard. There are even some categories below Standard for particularly high-risk people.

And what a life insurance company considers “risky” may be different from what you do. Having high blood pressure is risky, but it can be managed with medication.

But if you’re depressed, life insurance companies worry that you may eventually take your life, so if you take an antidepressant or are in therapy, watch out.

And watch out if you have a poor driving record. Just two or three tickets in a five-year period could land you in the Standard category.

Lastly, life insurance companies may also be wary of applicants with poor credit histories because people with bad credit or a bankruptcy might not pay their insurance premiums or might commit suicide due to financial stress.

And don’t try to lie on your application. If your death is related to something you lied about and the life insurance company finds out, it won’t pay your benefit.

A better way to keep your rates low is to shop around. Different life insurance companies view risk differently.

If you want a life insurance policy but are concerned about risk factors, we can help you. Call or email us for more information.