or a life-shortening disease.
When 49-year-old Femi Obikunle began shopping for life insurance three months ago, the price seemed right. For under $900 per year, the generally
healthy father of four was told he could likely get a $500,000 term policy. Then came the physical and blood tests. The new rate he was quoted: more
than $4,000 per year.
Youd think that the routine screenings had found something seriously wrong with Obikunle, say abnormally high blood pressure or cholesterol, or a
life-shortening disease.
But there wasnt anything terribly wrong with Obikunle at least not a condition any doctor would treat him for. Instead, the rate he was quoted more
than quadrupled because his blood sugar levels indicated he could be pre-diabetic. His doctor disagreed and Obikunle says he probably just drank a few
too many sugary drinks in the days leading up to the tests.
Its outrageous, the Columbus, Ohio resident says. Even though the doctor will say your range is alright, the requirements insurers want are much too
stringent.
Most people know smoking, obesity and high blood pressure can mean paying more for life insurance, but increasingly, other factors have been keeping
even those in good health from scoring the best-available rates. On paper these days, a 40-year-old man in very good health and no real risk factors
could buy a $500,000, 20-year term policy for as little as $360. But few people actually pay that little.
Life insurers generally tier their rates and the price goes up exponentially, between 25 percent and 50 percent each time you fall from a high tier to
a lower one. Preferred plus, the lowest rate available, is reserved for those who are in excellent health and who have no risk factors, says Byron
Udell, CEO and Founder of life insurance comparison and quote website AccuQuote.com. Add a risk factor or two or three and youll be bumped to a lower
tier and pay more. And some insurers add surcharges for undesirable behaviors, illnesses or hobbies.
The world of underwriting is not just height, weight, blood pressure and a good note from your doctor, says David Solie, president of RiskTutor Inc.,
a Calabassas, California underwriting and risk management coaching firm.
It can be hard to figure out exactly which little things insurers consider big things. But just one could boost your yearly premium on a 20-year term
policy by $100. Have two risk factors and your policy could cost $300 to $600 more, not including any surcharges, Udell says. Over 20 years, thats an
extra $12,000.
Little things that mean big rates:
Sickness you dont even have yet
As Obikunle discovered, early warning tests are increasingly popular tools for insurance underwriters. Test pre-diabetic or pre-hypertensive by
insurer standards not by doctors, whose clinical standards allow more wiggle room and youll be pushed to a higher rate tier. In some cases, like
Obikunles, youll also pay a surcharge. The industry is looking for an economical way to screen risk and this early recognition technology is a way for
them to do this, says Solie. There are early recognition tests for markers of heart disease, diabetes, hypertension and more ?????? ???.
Traffic tickets
If you got caught speeding, running a stop sign or talking on your cell phone while driving, insurance underwriters assume youve probably done it
hundreds of times before without being caught. Risky driving behavior, even the mild kind, raises a red flag and premiums. Ohio National, American
General and several other large insurers will knock you down one tier or more if you have more than one moving violation in the prior three years,
says AccuQuotes Udell.
Others set the bar at more than two tickets. Expect to pay $100 to $300 more per month if youre a lead foot. If youre over 50, youll pay a higher rate
and might also face a surcharge. The best-rate premium for a 50-year-old non-smoker with two tickets in 36 months: $1,000, says Udell.
Those five extra pounds
Some insurers dont charge higher rates unless a customer is 20 to 30 pounds overweight. But several start up charging at a measly five or 10 pounds.
That means a 6-foot male who weighs 220 pounds could pay up to $300 extra per year. Udell says it usually doesnt matter if the extra weight is muscle.
If you fall outside the standard weight chart limits and are in great shape, it cant hurt to take a photo of yourself in workout attire or shirtless
if you are male to show that you might be over the limit, but arent overweight, Udell suggest.
Getting treatment even if it makes you healthier
If you take medications to treat high cholesterol, some carriers will penalize you even if the medication works, because the treatment comes with its
own risks. Blood pressure medications almost always push you into a more expensive price tier. Its the same story for anti-depressants, even if you no
longer take them. It would seem that the person who gets treated is a better risk, says Solie. But thats not how the industry has looked at it.
Most life insurance applicants sign a form that allows insurers to access prescription data provided by pharmacy benefit providers (like Caremark or
Medco). That report will show all the prescriptions youve had filled in the last three to five years, coded based on its red-flag raising level, says
Solie. To avoid the price penalty, Solie recommends asking your doctor to vouch for your recovery, especially if your treatment lasted less than a
year and was related to an isolated event.
Family history even if Dad ate bacon and smoked and you dont
Your father had a heart attack at age 55. But he smoked, ate poorly and rarely visited a doctor ??????. You, on the other hand, have never touched a cigarette, dont eat fatty foods and go for a check-up twice a year. Unfortunately, few
insurers will care. A parent with heart disease will rule you out of preferred plus and knock you into the second or third tier, no matter how healthy
you are, Udell says.
Occasional hobbies
Like to scuba dive below 60 feet, but just on vacation? Have a private pilots license and fly just for fun, but fewer than 50 hours a year? You will
pay more and maybe a lot more. If you piloted a small aircraft between 50 and 200 hours a year or scuba-dived regularly (and in countries with
enforced safety standards), youd actually be a better risk, says Udell. But occasional hobbyists are considered less experienced and, therefore http://www.monclers.biz/forum, more of a risk ?????. Expect to be knocked down at least tier and to possibly pay a risk surcharge.
Source: - http://blogs.reuters.com/reuters-money/2011/07/15/how-a-traffic-tic...
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