For life insurance, whether you get a great rate or a cost-prohibitive one depends almost entirely on medical underwriting, which considers many health risk factors. You can increase your likelihood of getting the coverage you need at a low price by doing the following:
1. Invest in your health
This may involve taking steps to resolve underlying health issues if possible and may include diet and exercise changes. For instance, being considered overweight when you apply can negatively impact your rate because you may be at a greater risk for certain diseases than someone who is at a healthy weight.
2. Apply at a young age
The younger you are the lower your rate will be. Even a few years can make a difference. Every week I speak to someone in need of life insurance who is unable to qualify due to health problems because they have waited until well past retirement age to seek life insurance. If you are seeking long-term coverage at the best possible rate, apply prior to age 50. Although you can—and should—still apply even if you are over age 50, options may be limited and more expensive, especially if you have health problems.
3. Time your application well before international travel
When underwriting, most insurance companies ask if you have any definitive plans to travel outside the US within the next 12 months. If you will be stateside for at least the next 12 months, you’ll be in a better position to qualify for the best rates.
Special note for missionaries:
Many healthy, young missionaries apply for coverage only to be denied because they will soon be traveling to a foreign hotspot. For them, the best time to purchase coverage is immediately upon return to the U.S. for itineration.
4. Buy enough coverage
Many times people will buy a small policy initially and seek to increase it or upgrade it down the road, mistakenly thinking this will save money in the long run. However, each time you want more coverage you have to go through the complete medical underwriting process again. It is much better to buy enough coverage to meet your needs for the next 10-20 years. A good rule of thumb is to purchase about 10 times your gross annual income, plus debts. This way, you can lock in on good health and favorable underwriting now, rather than facing a possible decline later.
5. Adequately insure a non-working spouse
If there is only one income earner in the family, you may be tempted to only buy coverage on the breadwinner. Please don’t overlook the value a non-working spouse brings to the family. Although the household income may not be impacted by losing that spouse prematurely, expenses will undoubtedly increase, often quite drastically. Think of the additional cost if you have to pay for daycare, babysitters, or housekeeping. These are things many people fail to calculate when purchasing insurance.
Although these recommendations do not guarantee a low rate, you stand a much better chance of getting one by following them. If you would like more information on your life insurance options, call 866.662.8210 or email info@agfinancialinsurance.com.
