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Life Insurance -
Ways to reduce your life insurance premiums |
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Life insurance is a chancy matter. Although it gives you sense of security and a peace of mind knowing your loved ones would be taken care of should the worst happen, you sincerely hope that security and peace of mind will never be needed. Equally the insurance companies hope they won’t have to pay out on your insurance; they want to invest the money and make a profit.
How much you pay also comes down to lady luck and certain risk factors associated with your lifestyle. If one or more of these risk factors is present, you may be classed as “high risk”, and subsequently either cannot get life insurance or have to pay greatly increased premiums because the insurers are more likely to have to pay out than with the average person.
But who exactly is classed as high risk? Without wanting to sound callous, people in the high risk category are more likely to die. For instance, if you already have an existing medical condition or a sketchy medical history, such as either suffering from or in remission from cancer, insurance companies will charge you to reflect the risk of potential illness and fatality in the future. Family history is also important. If conditions such as high blood pressure, heart disease or cancer are present in your family, even if you have never suffered from any of the conditions yourself, you will still be seen as a risk to insure. An additional, and probably obvious, factor is age. A sixty year old will pay higher premiums than a 25 year old.
Let’s face it, no one enjoys being reminded of their mortality so life insurance isn’t always the most popular subject to choose. It is, however, important for the well being of those around you. So what can you do to bring those premiums down?
If you like vegetables and can skip a Sunday roast, becoming vegetarian is a relatively new, but effective way to reduce the cost of your premiums. A lot of insurance companies are now working from the perspective that a veggie diet reduces the risk of some cancers and, the big one, heart disease. The managing director of Animal Friends Insurance, Elaine Fairfax, commented: "The risk of vegetarians suffering from some cancers is reduced by up to 40% and from heart disease by up to 30%, but despite this they have to pay the same life insurance premiums as meat eaters. The life insurance industry needs to acknowledge the fact that being a vegetarian can have a very positive impact on life expectancy and reduce premiums accordingly."
Secondly (and a vegetarian diet might help with this) lose weight. The risks associated with obesity are well publicised and those who are considered at risk from conditions like high blood pressure and diabetes will pay higher premiums since obesity can cause death at a relatively young age. Insurance companies use the BMI scale – body mass index – to see where you fall on the underweight/normal/overweight scale. If you could benefit from shedding a few pounds, you might really see the difference with your premiums as well as your figure.
If you are a woman and want to start a family someday, then now is the time to start researching a life insurance policy. Insurers, not surprisingly, don’t exactly jump at the chance to cover a pregnant woman because of all the ailments and risks associated with pregnancy. Changes in blood pressure and blood sugar during pregnancy are not unusual, but insurance companies don’t like it. Financial group Torquil Clark’s Philippa Gee explains: "While very minor ailments during pregnancy are unlikely to cause concern among insurance underwriters, there are a number of conditions, such as high blood pressure and diabetes, which can affect pregnant women unexpectedly and which insurers will consider a greater risk."
Lastly, just don’t smoke. As much as insurance companies get jumpy over obesity, smoking is a sure fire way to send your premiums sky high – as much as 100% more expensive in some cases. The reasons smokers’ pockets are pillaged when it comes to life insurance are obvious and the only way to counteract that is to quit.
Remember that definitions of high risk will vary from insurer to insurer so make sure you are fully aware of you insurer’s jargon. If at any point your circumstances change in a way that could potentially affect your status, inform your insurance company and be aware of where you stand – if the worst happens and you have not fully disclosed all relevant information, your family may be left without a penny.
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