Let’s face it, no one wants to think about life insurance or death in your late twenties. Instead your biggest concern at this point in life is probably paying the electric bill or keeping up on the rent.
While we would rather be knocking items off of our bucket lists than worrying about life insurance, it’s a great benefit to you and your loved ones, especially if lock in an affordable policy now while you are young and healthy.
Getting life insurance can provide more than a significant inheritance to your loved ones, it can also be used to collateralize a small business loan or protect a mortgage. If you’re considering life insurance, here are a few things that you’ll encounter when starting the process.
Determining your risk class
If you’re new to life insurance, it’s important to understand how the insurers evaluate your health and your “risk.” Insurance companies use a classification system to determine the cost of each applicant’s insurance. The most common rate classes are ‘preferred best,’ ‘preferred,’ ‘standard plus,’ and ‘standard.’
Besides your health, insurance companies look to your lifestyle and your occupation. Smokers and people with hazardous occupations or dangerous hobbies pay more than individuals in comparable health that do not smoke or work a regular nine to five job as compared to working as a Student Pilot Instructor.
Taking a medical exam
If you’re in good health and you have regular check-ups with your doctor, you may be able to avoid a medical exam and still lock in low rates. If you have a few health issues, it may be in your best interest to take an exam. If the insurance company has to guess about your health, they will charge you a higher monthly rate.
If you have recently recovered from a surgery or a serious health issue like a heart attack, you can still qualify for life insurance, but most companies will require an exam for approval. The insurer will want to see that you are following your doctor’s advice and staying on top of your treatment.
Getting a quote
The cost of life insurance varies greatly depending on your age, gender, current health status, and medical history. In addition, your term duration and the amount of coverage you buy also has a direct impact on your rates.
Every life insurance company sets their own pricing and guidelines, which is why you should always compare rates from at least a dozen companies. If the factors are a little bit too much for you to bear, getting instant life insurance quotes is a smart way to estimate the cost of your coverage before contacting a licensed insurance broker.
Article by: Cliff Pendell