Request a Life Insurance Premium Review Following These Changes

 

Request a Life Insurance Premium Review Following These Changes

The underwriter evaluates the information provided on the application and follows specific guidelines for every policy. Standard life insurance policies are assessed carefully and placed within one of many an existing risk classes. A policyholder cannot be charged a different premium than other people in the same class. Any application that falls outside the existing classes will be considered uninsurable when the underwriter responds to the applicant.

Thousands of existing policies provide additional annual premium information for the underwriter. Annual premiums are designed to cover the cost of insuring the life of each person in the class. Insurance companies assign annual premiums that will remain in effect as long as the policy is in force. Terms of each life insurance policy will include the factors used to conduct evaluation of the risk presented. Risk assessments include:

 

·         Applicant age and anticipated lifespan

·         Existing medical conditions

·         Lifestyle factors that present risk

·         Type of life insurance policy

 

Policyholders will pay the annual premium associated with the perceived risk of death associated with the unique combination of these factors. Reducing the annual premium is possible if the policyholder will follow these recommendations.

 

• Quit smoking – Policyholders who stop smoking should contact the life insurance company. Smokers pay higher annual premiums than non-smokers do because of the health risks that increase the probability of premature death. A doctor’s letter will be required as substantiation that smoking is no longer a lifestyle choice. The insurance company can require an annual checkup to verify that the policyholder does not restart the smoking habit. In some instances, the insurer will require that a certain period of time passes, such as six months, before changing the annual premium to a non-smoker rate.

 

• Lose weight – Obesity-related health conditions, such as high blood pressure and diabetes, will develop when the policyholder carries excessive body weight. Insurance companies reward slender policyholders with lower annual premiums. Weight loss is one of the most important activities a policyholder can embrace to reduce the annual life insurance premiums. Information from the underwriter can be obtained to determine how much weight must be lost and the waiting period required. Insurance companies have actual statistics concerning the mortality of people who are overweight and obese. Longer life spans are evident when people maintain healthy body weight.

 

• Buy term life insurance – Unless the whole life policy is purchased early in life, the policyholder will find term life insurance to be the most affordable form of coverage. Excellent life insurance rates are available for loyal customers who purchase homeowners and auto insurance from the same company. Age is the primary factor when determining the initial annual premium. As each term expires, the policyholder must determine if the cost of insurance remains affordable. Life insurance agents are adept at recommending ways in which the policyholder can retain coverage and save money.

 

• Change payment – Life insurance companies reward policyholders who pay the entire annual premium in one payment. Administrative costs are lower when the policyholder signs up for automated payments, too. These actions can save 10 percent on the annual premium associated with the life insurance policy. Over a number of years, this savings will reduce the annual premium for the policyholder. All insurance policies should be paid in this manner to reduce all insurance costs.

 

• Eliminate risky hobbies – Elimination of high-risk pastimes, such as hang gliding and skydiving, can allow the policyholder to enter the standard life insurance market. Lifestyle risk is the primary factor, after age, that causes the insurer to charge higher annual life insurance premiums. Probability of death drops dramatically when the policyholder no longer participates in activities that fall outside the average lifestyle of most people. Recreational parasailing is not considered when underwriting a life insurance policy. Ongoing activities are noticeable when injuries are sustained and recorded on the medical history.

 

Accuracy is Required

 

Accurate information on the life insurance application is required to prevent the appearance of fraudulent misrepresentation. Applicants will be asked specific risk-related questions to discover the health and lifestyle factors that increase the risk of death. The existence of electronic medical records prevents applicants from withholding valuable information. Every detail on the life insurance application is considered when determining how much risk is associated with underwriting each policy.

 

Inconsistencies will cause the underwriter to request additional clarification from the applicant. The response to inquiries provides one chance for the applicant to correct mistakes and provide accurate answers. Multiple discrepancies that remain unaddressed can result in denial of life insurance coverage. Applicants must be aware that insurance companies keep careful records concerning previous applications. Accurate information prevents issues when attempting to acquire life insurance coverage in the future.

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