Having life insurance is a great way to protect your loved ones if they are financially dependent on you. If you are thinking about buying this policy, there are numerous things to consider. After all, even though the monthly premium doesn’t need to be very high, you will see that it is a significant investment when you calculate the overall payment.
When looking for the right life insurance, you will be presented with multiple options, and you will go with the one you feel most comfortable with. However, don’t forget that several factors can affect your choice, i.e., things the insurance company will go over when creating the right policy for you. In this article, we will discuss the most important ones.
First and foremost, there is the matter of your age as a future policyholder. It probably doesn’t seem that surprising that this is the first thing the provider considers. Well, when designing your life insurance, they determine what your monthly payment will be. A general rule is that the younger you are, the smaller the premium will be. Why? Statistically speaking, you will be paying that monthly premium for years to come, and it will be a long time before the company has to issue the check. Even though you don’t have to purchase it as soon as you get a job, unless you have a dependent, you have more options regarding the types of policies you can choose between when you are in your late 20s and 30s. At the same time, there are some insurances you cannot get before you reach a certain age, like the term life policy, that only people older than 60 can get.
2. General health
The next thing the provider will inquire about is your physical and mental health. Most companies will require you to do a complete health check and ask you about your cholesterol levels and blood pressure, and in some cases, they will want to see the EKG results. Now, some providers don’t necessarily require this information but keep in mind that they will most certainly offer policies with expensive premiums. It goes without saying that the healthier you are, the lower the payments will be. Due to this reason, it is a good idea to do a physical check beforehand. If you discover any issues with your blood pressure or cholesterol, you should get it under control and manage it before you meet with an insurance company.
What’s more, some providers may be interested in your family medical history. You will probably get higher rates if you have a genetic predisposition to strokes, heart attacks, cancer, and other diseases. Clearly, you cannot do anything about this, but it is something you have to keep in mind.
3. Lifestyle habits
Obviously, no one is going to ask you whether you go to the gym regularly and if your diet is healthy, but some providers may inquire about bad habits, such as drinking and smoking. Since these can cause numerous health-related problems in the future, they want to know about the risks. Truth be told, in some cases, smokers pay double the amount of money for insurance compared to people who do not have this habit. So if you are a smoker, you can either try to break this habit or be ready to make a significantly higher investment.
While on the subject of lifestyle, we have to note that your profession can play a significant role. There are some careers that are considered to be high-risk. If you are a pilot, driver, fisherman, miner, and even a roofer, you can expect your monthly payment to be higher. No, it doesn’t matter if you are in excellent health because people who work in these and similar industries are more prone to accidents, and in some cases, they might lead to an early demise. Also, if you enjoy mountaineering or car racing in your free time, you will be presented with the same terms and conditions.
We know this may seem odd, but it is a factor that is beyond your control. When purchasing life insurance, it is all about statistics, and women have a longer lifespan than men on average. If you want to buy one if your prime years and are a female, your premium will slightly lower. We already explained this, but companies offer better conditions to people who will pay them for more extended periods of time. Statistically, women meet this requirement, which is why they get to enjoy this benefit if we could call it that.
6. Policy’s coverage
Now, this is something you have to consider when looking for an insurance policy. Can it meet the dependent’s needs? What will the future expenses be? Do you currently have any loans, or are you in debt? Do you want it to cover your children’s education? How long will it be before they get another source of income? What are your wishes regarding your cremation or funeral, and how much will it cost? Yes, there is a lot of questions you need to answer beforehand, and once you do, it is time to check this list of top 10 life insurance companies and see what they offer.
7. Driving records
This is another factor many people don’t consider, and in some cases, they don’t even know that the providers check their DMV records. They may ask you if you have made any traffic violations or have been in car accidents, or they may investigate it independently. Obviously, if you have caused several collisions in the past, you become a risk, and your monthly payment will go up. Yes, it works the same way as dangerous and adrenaline-filled hobbies. Nevertheless, keep in mind that they are most interested in the past three to five years. So, an accident you suffered or tickets you got a decade ago may not play a significant role.
To sum up, these are the most critical factors you have to consider when purchasing life insurance. Since these things can be confusing, you should always turn to a professional for advice and further explanations.