10 Life Insurance Underwriting Tips To Lower Your Costs

Life Insurance Underwriting — Demystifying The Black Box of Underwriting

  • Extra weight. Most people carrying extra weight miscalculate by a lot how their premiums will be affected. Typically, unless the extra weight puts you in the obese class or is causing other medical problems, added pounds do not automatically warrant any rate increase.
  • Cardiovascular issues. Many life insurance companies excel at underwriting these cases. If there is good follow up and control, many insurance companies will consider standard rates after a few years.
  • If you have had cancer in the past, you have a reasonable chance of getting a policy with standard or preferred rates, depending on the history and your current health. Do not assume the worst; this is a classic mistake made by people and their advisors, including their physicians. I have many clients with cancer history who now have standard rates.
  • People with Type 1 diabetes typically have impaired life expectancy across the board, so your rates will depend on how well controlled your condition is and what you need to control it. If well controlled, Type 2 should lead to a smaller spike in rates. Diabetes is complicated and requires excellent underwriting.
  • Mood Stabilizing Drugs, Depression, Psychotherapy. If you’re taking medication for an ongoing condition such as anxiety or depression (meaning it’s more than just a temporary state due to, say, a loved one’s death), you will probably see higher rates, but typically not what most people expect. The insurance industry needs to review these issues regularly as the medications are better and untreated anxiety and depression is far worse.
  • Family history. If immediate family members have had serious or hereditary conditions, that may prevent you from getting preferred rates. The biggest culprits here are cardiovascular disease (especially if a parent died from it before 60), cancer and diabetes.
  • Cholesterol & High Blood Pressure. Controlled high cholesterol and blood pressure, by themselves, typically do not add extra cost or deny you preferred rates. With these conditions, it is all about control and stability.
  • Nicotine use. The use of nicotine comes in many delivery systems and life insurance companies are not consistent about this topic. Using the Installment Payout Option can help smokers reduce their premiums by as much as 40% per year.
  • Driving History. If you have more than two moving violations in the last three years, you likely won’t be able to get the best life insurance rates. Time is your friend here, even for the most serious offenses.
  • Substance abuse. It is impossible to generalize with substance abuse history. However, with full disclosure and a strong record of non usage, life insurance can be obtained at standard rates.
  • Lifestyle/Career Issues. Any hazardous, regular activities such as rock climbing, motorized racing, skydiving, ultralight flying, hang gliding, and scuba diving could increase life insurance premiums.

Retirement Planning, Income Replacement, Wealth Preservation

The biggest financial concern for retirement age Americans is having insufficient income and assets during retirement. Is it yours?

Ted Bernstein

Written by

Retirement Planning, Income Replacement, Wealth Preservation

The biggest financial concern for retirement age Americans is having insufficient income and assets during retirement. Is it yours?