There is a definite time when many of us begin to consider obtaining life insurance to protect family members and loved ones. It could be after a delivery or an attractive insurance commercial that modifies your interest. When this time comes, the first thing most people do is get a quick quote online to understand their overall rates. A more detailed evaluation follows. Some elements of this evaluation are intuitive (age, health status, smoking, occupation, etc.). However, there are other surprising evaluation criteria that subscribers take into account as well. Such as …
- Driving history: Yes, your driving record matters, not only for your auto insurance premiums, but also for your life insurance rates. If you were in a DUI accident in the recent past, you are likely to experience significantly higher quoted rates than someone who has a clean driving record. Remember that minor offenses disappear from your driving record after three years (for insurance purposes).
- Be happy: Having a history of depression can hijack your life insurance premiums, almost doubling them. Happy people experience fewer health problems and stress, and therefore pose less risk to insurance companies.
- Policy date: The policy start date can sometimes be adjusted (also called retroactively), which means that in some cases you can benefit from lower premiums (based on your youngest age; if you turned 50 this week but downgraded your policy at last month, for example). Obviously, you will have to pay all premiums from the retroactive point of time, but you may benefit from a lower rate in the future.
- Dangerous works (eg stuntmen, bomb squad member) can put your life at greater risk and therefore lead to higher insurance premiums. Do you think your job is dangerous?
- Payment frequencyPaying for a life insurance policy annually saves insurers administrative costs and rewards you with lower premiums than if you had paid your insurance monthly. However, in this case, you will need to plan carefully because a large annual fee can create a significant hole in your household budget if you forget about the annual premium.
- Travel (to dangerous destinations): Some destinations are more dangerous than others and some are very dangerous (war zones, areas with a known history of kidnapping, etc.) Consult with an insurance broker or your agent to understand how your future plans may affect your insurance coverage. Your policy may be rejected or you may be able to get a life insurance policy, but it would explicitly exclude the time you are abroad. In some cases, a simplified problem without a health life insurance policy is a solution, since it does not ask questions about travel. However, it is important to know that a simplified issue policy is more expensive than a standard one and its coverage is generally limited to $ 50,000 – $ 300,000. You can prove this by getting an anonymous simplified issue without a medical life insurance quote through one of the numerous online insurance platforms.
- Extreme sports): Being involved in extreme and / or dangerous sports, especially professionally, can affect your life insurance premiums (ex: skydiving, cliff diving, diving). Similar to getting insurance while traveling to dangerous places, you need to understand which cases are not covered by your life insurance policy.
- Private pilot licensesThis one usually falls into a category of dangerous hobbies: Licensed pilots (private only) may experience higher insurance rates. When calculating insurance premiums, an insurer will consider both the age and experience of the pilot. This information will probably not be requested during the initial quote process, but will be required during the detailed evaluation later on.
- Your citizenship: If you are not a Canadian citizen or resident, you will not be able to apply for a Canadian life insurance policy.
- Your income: Insurance companies can reject your life insurance policy if your household income falls below a particular threshold, usually $ 30,000. The reasoning behind this is that insurance does not stretch your budget beyond your capabilities. Note that you still need to speak with a broker to create a detailed future plan for insurance protection, and brokers who are also financial planners can help you sort through your upcoming financial expenses to better manage your needs. It is a good idea to check with your insurance broker, if your income may be a problem, before submitting your application. Remember that once you have been rejected for a life insurance application, it can affect your next applications, as some insurers include in their surveys: “Have you ever been rejected for a life insurance application?” Similar to a pilot’s license, this question may not be included in the initial quote questions, but will be asked by your insurer later.
As you can see, many non-health issues affect your life insurance rate and policy. You should remember that underwriting (application evaluation) rules are different between insurers and therefore it is advisable to work with an insurance broker who works with numerous life insurance companies and can share their experience with you while browsing through this complex process.