Life Insurance is a lot like going to the dentist, you hate to think about it but in the back of your mind, you know you need it. People often put off talking about it; understandably because it’s an acknowledgment of passing away. Yet, life insurance is so much more than a mortality check, it’s a way to guarantee the people who depend on your income will be protected. Before you shop for policies, it would be helpful to know what the classification levels companies use when crafting your policy.
How low can you go
When creating your policy, a company looks for health indicators, family history, and your habits, such as smoking. What you may consider healthy may be vastly different from an underwriter considers healthy. For example, smoking cigarettes, and even vaping can be hindering your ability to lock in a low rate. On the flip side, individuals with no personal health or family history of health complications will lock in a great rate. You may be asking yourself how a person applying for life insurance would not have any past health issues, and it may be due to age. Often times, people wait until they are much older before obtaining life insurance, but they should do the opposite.
Low Age, Low Rate
Since companies base your policy rate on health-related issues, it would make more sense to lock in a rate when you are relatively young. For the most part, people are healthier in their youth. At 35, for example, you may have a family of your own and a good career job. In other words, you have a good income and a family that likely will depend on your income at some point. No one wants to think about their own mortality at that age, but it’s important to make sure your family will be ok no matter what. If you obtain life insurance at a relatively young age, you can lock in a rate that gives you peace of mind while not breaking the bank. Additionally, certain companies let you add to your policy as you age, so you’re not paying for things you don’t need from the start.
Regardless of when you obtain your life insurance policy, companies use the same classification levels for their customers. Here is a helpful guide put together by Policy genius.
Although it may be discouraging to be placed in a category such as standard or substandard, at the very least you can be happy that your life is insured. Additionally, those in the preferred categories have a better chance of improving minor health issues to get a better rate. Regardless of which classification you are placed in, talking about life insurance is not easy for most people. If you plan on having the conversation with loved ones keep in mind that life insurance is like other insurances, not a death sentence but a protection instead.