Life Insurance Cost: Preferred or Not?
When individuals check term life insurance rates, they usually assume they will qualify as a preferred risk. However, it is possible that people with perfect health will not qualify as preferred. Here are some situations that make obtaining preferred life insurance rates difficult, if not impossible.
A high ratio of bad cholesterol (LDL) to good cholesterol (HDL): Even when someone has a total cholesterol that may fall in every life insurance company's preferred guidelines, the ratio may cause the individual to be a standard risk. Ratios over 6:1 usually do not qualify as preferred.
Hobbies: A private pilot in perfect health might not even qualify for standard life insurance rates and may end up being rated by many life insurance companies.
Immigration Status: A new immigrant in the U.S. without a permanent visa will not qualify for preferred rates with many life insurance companies.
Driving record: Too many speeding tickets will cause an applicant to be a standard risk, or worse, with many life insurance companies.
Find a Life Insurance Policy at a Cost You Can Afford
Make Sure You Understand The Cost Breakdown
Many times, the life insurance companies listed as the lowest cost plan for preferred will not be the lowest cost for the applicant when the final underwriting is over. What should you do to make sure there will be no disappointment in the purchase of life insurance?
- Choose an agent that represents many life insurance companies.
- Make sure that the agent you deal with asks you enough questions to see if you will qualify for preferred rates with any of the life insurance companies on the database.
- Don't be afraid of standard life insurance. It is more important to get the life insurance you need, even if on a standard basis. If your health improves, you may qualify for preferred rates in the future. However, if your health deteriorates, you still have the standard life insurance coverage.
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Keeping Life Insurance Cost Down
The price you pay for life insurance will depend on your age, your health and your habits. That is to say, forget about a really cheap policy if you smoke, have existing health problems or enjoy skydiving. Still, there's plenty you can do to save on your premium and avoid some common pitfalls. Here are some suggestions from Smart Money: Forget corporate loyalty. If you get some life insurance as a job benefit, that's fine. But that should never be all you have. You can't count on keeping it if you lose your job or become disabled and can no longer work. Make sure you negotiate. Buy your insurance in bulk. Seek out a specialist of you have health problems. Don't get scammed! Keep a level head, explore all options available and you should have no problem finding a low cost life insurance policy.
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