In this article we’re going to discuss just a few factors that come into play when it comes to determining whether or not you’ll qualify for a Preferred life insurance rate or a Standard life insurance rate.
Now before we get started…
We want to make it clear from the beginning that the main point of this article will be to demonstrate that not all life insurance companies “are equal” and that knowing which life insurance company is “right” for you could mean the difference in getting a Preferred rate vs a Standard rate.
So if saving quite a bit of money sounds like a good idea to you, we suggest that you keep on reading!
5 Common factors that cause someone to get a standard life insurance rate
Now there probably are over 1000 different reasons why someone may end up receiving a Standard life insurance rate vs a Preferred life insurance rate, particularly if you factor in all the different prescription medications folks take now a days and how insurance companies will factor those into how they’ll factor them into their underwriting practices.
But for the sake of this article we’re just going to focus on 7 common factors that will often cause people to pay too much.
1. Body Mass Index.
One of the first questions you’ll be asked by an insurance company is what is your height and weight, it’s also one of the main reasons why someone will automatically be categorized into a particular rate class regardless of their overall health!
Now in the context of this article, it would be impossible for us to list all the different height and weight charts for the dozens of different life insurance companies that we work with but we can stress a few of the major differences that you’ll find between the different insurance companies.
Not all insurance companies use the same height and weight ratio charts.
Meaning that if you’re just 1 or 2 lbs over what might make you a Preferred candidate with one insurance company, it might make sense to choose an insurance company that is more “liberal” with their underwriting body mass guidelines and thus be able to qualify for that Preferred rate!
Some insurance companies don’t differentiate between men and woman.
Which means that if you’re a woman that may just be 1 or 2 lbs over what would allow you to qualify for a Preferred life insurance rate with one company, it may make sense to take a look at a company that does not differentiate between men and woman when it comes to “body mass” so that you’ll be able to qualify for that Preferred rate.
Lastly, we want to take a moment to address what some life insurance companies offer which we’ll call “healthy credits”. Now those companies that do offer these, will often use different terms to describe this feature to their underwriting practices, but in general, what these are is a way for a candidate to “earn” a better rating despite their body mass index or some other factor “dragging down” their rate class.
So let’s say that you’re a professional body builder or someone that is just really short. In either case, it may be really difficult for you to “fit” into the “norm” of what a typical life insurance company is looking for. In cases like these, some insurance companies will then look at other factors such as your current:
In an effort to “off set” the negative impact of your body mass index.
So the question then becomes:
“If your body mass index is automatically making you a Standard risk, does your life insurance agent know which insurance companies offer Health Credits? And are they able to work with those companies?
2. Family Medical History.
Family medical history is one of those topics that should always be discussed early on during an application process particularly when working with an agency like TermLife2Go that has access to dozens of different life insurance companies.
This is because in many situations, a completely healthy person that should have no problem qualifying for a Preferred life insurance rate, can in some cases be completely “sabotaged” by an unhealthy parent or sibling.
For example, depending on which insurance company that you apply with, you may find your Preferred rate suddenly become a Standard rate simply because:
Your father who smoked 3 packs of cigarettes a day for 20 years had his first heart attack at age 50 year of age.
Now does it matter that you don’t smoke and that your super healthy? It should, but for some life insurance companies, simply because your father had a heart attack at a young age, you’re now going to be considered a “higher risk” for life insurance.
Or how about if your sister was diagnosed with breast cancer at age 54?
We’ll if you’re a woman, it may make sense to factor this in to the underwriting decisions made by some insurance companies, but how about if you’re a man? Does it really make sense to penalize the brother in this situation?
We here at TermLife2Go don’t think so, in fact we don’t really think it makes sense to penalize anyone for the health of another, which is why we ask about one’s family medical history early on during the application process so that we can “weed out” those less favorable life insurance carriers right away!
3 and 4. Blood Pressure and Cholesterol Levels.
Since so many Americans suffer from high blood pressure and cholesterol levels and since these two conditions will often times go hand in hand, we figured that we’d just discuss them together in this segment of the article.
That being said, there are really two factors that you’ll want to be sure of when applying for life insurance while taking medications to treat your blood pressure and cholesterol levels.
First, will the life insurance company that you’re applying with allow you to qualify for a Preferred rate provided that your blood pressure and cholesterol levels are well controlled? Or will the company “automatically” consider you a Standard risk?
Second, if you’re blood pressure and cholesterol levels are well managed but still a little high, are you applying with one of the more “liberal” companies out there when it comes to blood pressure and cholesterol levels?
If you don’t know, we would suggest that you give us a call and allow us to compare your options with you!
5. Marijuana Use.
So, up until now we’ve only really discussed some of the “normal” factors that can often lead to one being automatically rated a Standard risk for life insurance, but with the proliferation of marijuana use in American today, it only makes sense for us to briefly discuss how its use can “unnecessarily” cause someone to get stuck with a terrible life insurance rate for now reason.
You see with nearly 14 million Americans using marijuana on a regular basis, it’s important for those folks to know that not all insurance companies are going to “view” Marijuana use the same. Some will flat out deny marijuana users or burden them with a “tobacco” rate, while others will have no issue with the use and offer them a Preferred Plus rate!
Which is why, if you do use marijuana, you should certainly admit to it and….
Choose to work with a life insurance brokerage that will know which insurance companies are going to be the best for you!
We at TermLife2Go work as an independent life insurance brokerage that is capable of working with dozens of different life insurance companies so that when we find someone that is on the “edge” of a Preferred or Standard rate, we don’t just have to “hope” for the best, we can strategically apply with the company that we feel will give you the greatest opportunity for success.
So what are you waiting for? Give us a call today and see what we can do for you!