Insurance companies lose a lot of money if you die while you're their customer, so any risk you take is a risk for them. Because of this, insurance companies tend to charge more for people with risky behaviors or health risks. Here are three of these risk factors that affect insurance rates.
1. Health conditions
Pre-existing conditions are a big risk factor that insurance companies may sometimes even be unwilling to take on. If you have a health issue, it can either cause insurance companies to raise their rates or it can inspire them to refuse life insurance for you altogether. This refusal, even by a few companies, can drive up prices still more with any companies that do agree to insure you. These health issues are often things that you have no control over, such as heart problems, but sometimes they're things like a few extra pounds that you may be able to shed with a healthy diet and a gym membership.
2. Hazardous behavior
Insurance companies also see you as a high-risk investment if you engage in what they see as dangerously risky behavior. This can include things like a history of careless or reckless driving. However, it can also encompass recreational activities. Things like scuba diving or hang gliding are considered to put you at a higher risk for dying, which means that you're a riskier investment for the company, so they have to charge you a higher price to make it worth their while. If you've never been a thrill-seeker, this is good news for you because it means your rates will be lower.
3. Dangerous occupations
This is another aspect of your life that you're unlikely to alter just for a lowered insurance rate. Your job can affect your premiums because it may place you at a higher risk. For example, a vocation in which you work closely with wild animals may be your dream job, but it's also quite risky. Because of this, a job that your insurance company perceives as a high-risk occupation could raise the price they quote you.
These three aspects of your personal life are all of great interest to your life insurance company because they can affect your chances of dying young. For this same reason, they can also make the difference between getting a preferred rate and a higher premium rate for your life insurance policy. For more information, contact Farmers Insurance Group or a similar company.
Share4 November 2015
