Three Unusual Factors That Impact Your Life Insurance Premiums

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When applying for insurance, most people realize that their age will play a factor in the overall cost. Your overall health is also a contributing factor. Insurance agencies are going to charge more for someone who is older or in bad health because they have a higher chance of needing to be hospitalized down the road. While these are the two main factors, there are others, however, that play a part in how high your premiums are. Some may seem very unusual.

Driving Record

When applying for coverage, be aware that your driving record may be a factor in determining if you’re approved or not. Insurance agencies usually take this into consideration when you are applying for a large coverage amount. For example, Mutual of Omaha checks driving records for people age 71 and older who are applying for $500,000 of coverage. If you’re between the ages of 46 and 70, your record will be checked when you apply for $1 million worth. 18 to 45 year olds will have their records checked when applying for $100,000.

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According to the 2015 Insurance Barometer Study, only a third of consumers know their driving history may be a determination in whether or not they receive coverage. This low number doesn’t stop agencies from using the record if they see fit. With MetLife, you can only have one traffic violation if you want to qualify for Elite Plus rates. Elite rates allow you to have two violations.

Age Nearest

While most realize that age is a factor, many don’t know that insurance companies don’t often go by your actual age now. Many use the age nearest determination. This means if your birthday is in five or six months from now, the agency may use that age as the one to rate you by. Rootfin gives a good explanation of life insurance rates by age and how it works.

Since age nearest is the one most companies go by, you also need to be aware of when you’re filing for coverage. If they round up after six months, and you’re still eight months away from your birthday, they still may use the following year’s age. That is because the approval process often takes from four to eight weeks. After eight weeks, you will fall under the six month range and be bumped up to the next year’s age at that point.

Depression

Most people know that health plays a role in coverage costs. What they think though, is that it depends on your weight, blood pressure and cholesterol levels. Mental disorders can also play a part, however. Those suffering from depression, for instance, are more likely to experience high insurance premiums.

Not only are people suffering from depression at a greater risk for suicide, but they also have a higher potential to develop other health issues. Chronic depression could lead to cardiovascular problems because of high blood pressure and a weakened immune system. Feelings of hopelessness, a lack of exercise, bad eating habits, and lack of sleep all stem from depression. These things combined can drastically impact your health and raise your premiums because of it.

While these factors may seem unusual, they are commonly considered by all the insurance companies. Insurance companies typically charge higher premiums for those that are at higher risk for illness or death. Whether it stems from depression, a bad driving record, or the age nearest selection, high premiums will be handed out to many.