Life insurance is a very important financial product that can provide peace of mind and financial security for loved ones in case of your unexpected demise. It also offers several life insurance tax benefits. However, when you apply for life insurance, your health status can significantly impact the premiums you pay. Insurance companies use various health-related factors to determine your risk profile and, therefore, the cost of your life insurance policy. In this article, we will explore how your health impacts your life insurance premiums.
Before determining your policy premiums, the life insurance provider will want to know a lot of information about you when you apply for coverage. Your health is one of the most important factors to be taken into account.
But why is the relevance of your health when buying life insurance? There is a fine reason for this, after all.
A life insurance calculatoris a simple tool you may use online to determine the amount of coverage required based on your needs.
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Why Does Your Health Have An Effect On Your Life Insurance?
The explanation is rather simple. A person’s risk of passing away during the policy’s tenure is increased if they have a medical condition such as high blood pressure, diabetes, cancer, or cholesterol. If you smoke in addition to having one of these conditions, your life expectancy is substantially reduced.
Such policyholders pose a greater risk to an insurance provider than someone who is healthy and does not smoke. The insurance companies demand a greater premium because of the applicants’ shorter average lifespans.
How Will The Provider Of Insurance Know About My Health?
An insurance advisor will conduct a face-to-face interview with you before approving your insurance application and determining your premium. Along with your health, the medical background of your family will be discussed. This is due to the hereditary nature of several diseases, including diabetes, high cholesterol, high blood pressure, obesity, stroke, etc.
You are regarded as inheriting such conditions if your parents or siblings do. In such circumstances, the insurance company will view you as carrying a higher degree of insurance risk.
Can’t I Just Sleep Over The Truth?
To obtain a lower premium, it may be quite alluring to conceal information about your health or family’s medical history. However, if you pass away, your insurance company will carefully examine the cause of your passing.
There is a chance that the claim submitted by your beneficiary after your passing away would be denied if it turns out that you had a serious medical condition that the insurance company was unaware of. The money you will save on premiums is not worth jeopardising your family’s financial stability.
Be Transparent And Earn All The Benefits Of Life Insurance
It is crucial to understand that insurance companies evaluate your risk profile based on your health status and medical history. Therefore, if you have a pre-existing condition, your life insurance premiums will likely be higher to compensate for the increased risk. However, disclosing any pre-existing medical conditions or health issues while applying for life insurance is still advisable. Failing to disclose this information can lead to the policy being voided or the passing away claim being denied.
It is worth noting that insurance companies may not always turn down life insurance applications because of a pre-existing condition. In many cases, they may still offer coverage, but the premiums will be higher to reflect the increased risk. It is better, to be honest about any pre-existing conditions or health issues and pay a higher premium than to risk having the policy voided or the passing away claim denied.
Additionally, it is essential to understand that not all insurance companies treat pre-existing conditions equally. Some insurers may be more lenient or have more favourable underwriting criteria than others.
Your health plays a crucial role in determining the cost of your life insurance policy. If you have a pre-existing medical condition, you will likely pay higher premiums than someone healthy. However, there are steps you can take to improve your health and potentially lower your life insurance premiums. You can also avail of life insurance tax benefits. For instance, quitting smoking, maintaining a healthy weight, and exercising regularly can positively impact your health and reduce your risk profile. Therefore, it is essential to prioritise your health.
A life insurance calculator is a simple tool to check the amount of premium you would have to pay.