Life Insurance

Better Health Means Even Better Rates, But You Still Need to Compare

Tuesday, July 27th, 2010 Brian H. Ashe

Hey, it looks like the underwriting departments of life insurance companies may be willing to look at modifying “rigid” guidelines for what they consider “good” risks to be. For example, I read that The Hartford has started paying more attention to a person’s capacity to exercise as a marker of good health and better longevity. That doesn’t mean that insurance companies won’t look at your blood pressure, cholesterol, height and weight, etc. when considering you for life insurance. It’s just that now they seem willing to look at a couple other factors, too.

People who are athletic aren’t always thin; some have a lot of muscle mass. They may not fit in neat height/weight ratio categories, but they still may be in excellent physical condition. As companies are trying to be more inclusive of those who may be outside the historic underwriting physical benchmarks, they are also sharpening their pencils on other things like aggregate cholesterol, fractionated cholesterol (how your LDL compares with your HDL), a1(c) levels and other factors to try to give very healthy folks not only “preferred” but “super preferred” rates.

When I first started in the business, the underwriting categories were pretty much “standard” or “rated.” And if you were rated, it meant your rates for term insurance, for example, could go up by about 25% for each “table” you were rated, Table 1, Table 2, etc. Since then, companies introduced non-smoker rates, preferred rates, standard-plus rates, super-preferred rates and a number of other categories that you may qualify for.

While super good health may qualify you for special discounted rates, these many different categories also mean you need to be a discriminating shopper. Companies may advertise or illustrate their very best rates in order to attract your inquiry. Just remember that the final rate will only be determined when your medical underwriting is completed. And, make sure when you are comparing companies, that you are comparing the same underwriting class, i.e, preferred to preferred. There could be a 40% pricing difference between a preferred rate and a standard rate.

But the most important advice is to make sure you have enough life insurance. If you don’t, do some shopping. All the comparisons will show you that rates are lower than they have ever been. And if you need help, don’t hesitate to contact your agent or to find one in your area with LIFE’s agent locator.

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About the Author

Written by Brian H. Ashe

Brian Ashe, CLU, is president of Brian Ashe and Associates, Ltd., in Lisle, Ill. and treasurer of the LIFE Foundation.

5 Comments to "Better Health Means Even Better Rates, But You Still Need to Compare"

  1. Marc - Acne Skin Control Blog

    July 29, 2010

    It goes to show you that it pays to keep in good shape. I was not aware of all the different classes of life insurance that is available. I will keep an eye out for the best rates now.

    Reply

  2. Loans Arranger

    July 29, 2010

    As someone who works out on a regular basis and therefore perhaps weighs more than I should because of muscle mass I welcome the idea that I might not be penalised for doing so. Insurance companies are correct to acknowledge that regular excercise should help with overall physical condition and the bodies ability to ward off ilness.

    Reply

  3. Beverly Hills Insurance

    July 29, 2010

    Sounds to me like stringent qualification processes coupled with the economy going in the tank are hurting the insurance company’s bottom line. Forcing them to look at these other factors may entice people who couldn’t qualify before, or weren’t willing to pay the rates, may now revisit the opportunity and take advantage of this situation. Like you said, life insurance is a necessity, especially if you have a family, but when the insurance companies fatten up again, the rates are sure to rise with them.

    Reply

  4. Syl's Son

    August 1, 2010

    I think insurance companies are becoming smarter by looking at the minutia of a person’s overall health tendencies. It’s a great way to calculate risk and I think it is only the beginning of maximizing the way they do business.

    Reply

  5. stop smoking help

    August 13, 2010

    Another point of debate is the payout of life insurers. From what I understand, some are not as good at this aspect. They are great at collecting premiums, but can be difficult to work with during the payout stage after a death.

    Regarding the different rates now available, you are right. I am a respiratory therapist and work with patients who smoke all the time. They are far and away less healthy than nonsmokers. I’ve always been fascinated as to why people would continue to smoke despite the benefits, including, better rating for insurance.

    Will mysteries never cease?

    Reply

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