Life insurance is a smart way to protect your dependents financially. The funny bit is that you can save. But what can I save on? The quick answer is the premiums. Yes, you got that right; you can save on the same premiums that cost you money monthly or yearly.

We are going to show you how to do it when we focus on the factors that influence the rates. While some factors are out of your control, others can be remedied by changing your lifestyle and choosing to enjoy simple things. Let’s get started with the top 5.

1. Age

Generally, the youthful you are, the lower the rates. Why? Life insurance rates are calculated based on risks. The policy provider sees young people as less risky than older individuals. You are generally expected to live for several decades when you are 20 or 30 as opposed to someone who is 60 or 70.

Tips – Don’t wait to buy life insurance in later years. It would be best if you did it now. Whether you are 20 or over 50, the sooner you do it, the likelier you are to enjoy lower rates.

2. Gender

It is a universal argument that women tend to live longer than men. As a result, insurance companies quote lower rates for women as opposed to men. But still, life expectancy is not the only factor that makes life insurance more expensive for men than women. For example, men are more involved in riskier activities like fast car driving and firefighting, and this makes the premiums costlier for them.

Tips – There is nothing you can do about your gender. You need to ensure that you don’t give the insurance company another reason to raise your premiums if you are a man.

3. Health

Did you know that you can have your death benefits denied based on insurance fraud for not being honest about your health history? Insurance companies look at your medical records when determining your premiums. So you have to go through the necessary tests and provide correct information about a recent diagnosis, a surgery or a medical prescription. Though such factors can increase your premium, they protect you from being denied compensation.

And did you know that smoking can increase your life insurance rates? What about your family’s medical history? During your medical exams, you’ll need to answer questions that touch on your family health. If for example, your family has a history of heart attack or cancer; the chances are that the rates will go high.

Tips – Get a medically-underwritten life insurance policy. Such options typically come with lower rates. You can also lower your rates by staying healthy and quitting smoking. Additionally, you should go through the necessary medical tests and be honest with the results.

4. Lifestyle (Hobby and Occupation)

You probably didn’t know this, but risky hobbies like scuba diving, motorcycle riding, and rock climbing can negatively impact your premiums. Usually, the more dangerous the things you do, the higher the life insurance rates. For example, expect to pay an additional $2,500 on average for a $500,000 life insurance cover if you engage in risky interests.

You should also note that your hobby is not the only lifestyle element that life insurance companies observe. They also look at your occupation. If your line of work is riskier such as truck driving, mining, aviation or firefighting, expect to pay more.

Tips – While you probably can’t change your occupation, for now, you can make adjustments to your hobbies. Try engaging in less risky adventures to save on premiums.

5. Driving Record

Life insurance companies look at potential risks when determining the premiums. If you recently got involved in multiple over speeding incidences or collisions, it is a red flag, and it may mean paying more. Also, a DUI charge can negatively affect your rates or even worse, disqualify you.

Tips – Try to obey traffic rules and be a responsible driver. Do not drink and drive, over-speed or do anything that will raise a red flag on your driving record.

Closing Thought

Knowing the things that impact your life insurance is the key to saving on the rates. You can use the above guide today to start paying fewer premiums where applicable. It is as simple as that.

Sources

https://www.policyadvisor.com/blog/cost-of-life-insurance/

https://www.lowestrates.ca/blog/9-factors-influence-your-life-insurance-rates

https://money.howstuffworks.com/personal-finance/family-finance/life-insurance-premiums.htm

https://www.investopedia.com/articles/investing/102914/7-factors-affect-your-life-insurance-quote.asp