It is a­ precarious state of affairs in the financial world and the tax code remains debilitating. But instead of trying to fathom how the economic currents around the world or Wall Street affect your wallet, safeguard your wallet by securing the best rates for your life insurance policy. For this, you will need to know and understand how insurers calculate the premium on your life insurance policy.

An insurer who provides life insurance coverage arrives at a premium for you on the basis of what he thinks would be your life expectancy. The latter depends on a host of factors like your age, health lifestyle, and occupation. The rates you obtain also depend on your credit card scores. Some of these factors are in your control and knowing how they plug in to increase or decrease the life insurance premiums rates will help you save money.

Age

Your life expectancy is one of the most critical factors that insurers take into account when calculating your life insurance premium. The best rates, “best preferred” in insurance parlance, are acquired by the young. This is understandable because life insurance companies too have to make profit to survive competition and it is profitable for them to charge a higher premium rate if they determine that the insurance holder is aged and/or battling health issues and may not live very long. That is why, financial pundits ask you to buy a life insurance when you are young and make sure that the rates you receive hold strong for a long period with a level-term plan.

Health

As indicated earlier, your health and consequently, your life expectancy, is instrumental in determining the premium rate that you will have to shell out. Most insurers make it mandatory for policy seekers to go through a medical examination to determine the risks for certain diseases or to check for the presence of certain disturbing health conditions. For instance, being even slightly overweight, having a less-than-ideal level of blood pressure, and harboring a high cholesterol count mar your chances of securing a favorable rate for your life insurance plan. Similarly, people suffering from diabetes or mental health disorders or even with a genetic pre-disposition towards such diseases are relegated to the lower rungs of the insurance rates ladder. The best preferred and the preferred rates are garnered by individuals who are in the pink of their health.

Although you may not be able to control all aspects of your health, you can always make the effort to follow a healthy diet, exercise regularly, and manage the stress levels in your life. Apart from attaining the most lucrative premium rates, you will also thus be able to enjoy a better standard of life for a longer period of time. When they say that eating healthy pays off and maintaining your health is the smart way to go, well, this is another indication of that notion.

Your Occupation

Your life is important to your insurance company and whether you like it or not, your insurer will scrutinize even the most seemingly unrelated aspects of your life before quoting a premium rate. Your occupation is one such aspect that he will poke into. If your job entails high risks to limb and life or if you are in a high-stress job that brings with it its own retinue of health complications, then be prepared to pay high premium rates. Your chances of lucrative premium rates also take a dip if you are in a job that requires you to travel a lot.

Your Lifestyle

The premium rate you have to pay on your life insurance cover is also dependent on a host of lifestyle factors. So, be prepared to answer a lot of questions from your insurer about your daily habits and hobbies.

In this context, it is noteworthy to mention that insurers take quite a stern view of smokers. In fact, in the insurance circle, there is a separate class of premium rates that are slapped on smokers. If you are a smoker, then these rates may sometimes be as much as 30 percent higher than what non-smokers of similar age, state of health, and occupation as you have to pay. Some insurance companies even provide lucrative rates if you can furnish evidence that you have been off tobacco for a year. Smokers may consider this unfair (and even contend that other people are addicted to other harmful substances and yet are not penalized by the insurers) but you will probably agree that any incentive (with whatever ulterior motive) to give up on tobacco is laudable.

Since your insurer is acutely interested in your life and longevity, expect him to question you about your hobbies as well. If your hobbies include indulging in extreme sports such as skiing, bungee jumping, car racing, rock climbing, scuba diving, or any other activity that are considered risky, you will be charged a higher premium rate. Ben Stiller made a movie along this theme called Along came Polly.

Your Credit Card Score

It is widely believed that an individual who is rash and careless in one area of his life, is usually so in other facets of his life as well. Thus, the sole motive that prompts your insurer to enquire into your credit card scores is to ascertain your spending habits. A thrifty person is likely to careful about his health as well than someone who has accumulated myriad unnecessary debts, and thus is the ideal candidate to win the best preferred premium rates.

So, now that you have a fair idea about how insurers calculate your life insurance premium, it can be safely assumed that you will work out a plan to improve certain areas of your life and lifestyle to your insurer’s satisfaction. In fact, you will discover that the fringe benefit of trying to bag the best premium rates for yourself will actually end up being of the greatest benefit to you-doing away with unhealthy habits and practices and thus carving a healthier and a more productive long life for you to live.

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