Little Known Factors That Affect Term Life Insurance Rates

You're healthy, tobacco-free, and have ideal blood pressure and cholesterol numbers. So you should qualify for cheap term life insurance, right? Not so fast. Term life insurance rates can be affected by several little-known factors.

You're healthy. You're tobacco-free. You have ideal blood pressure and cholesterol numbers. You're the perfect candidate for cheap term life insurance, right? Maybe not. Term life insurance rates can be affected by several little-known factors.

Getting affordable term life insurance will depend largely on your health, medical history and age. That said, anything that constitutes a risk for premature death can impact your term life insurance rates.  

Here are five areas that can prevent you from getting cheap term life insurance.

1. Driving Record and Term Life Insurance Rates

Nearly 33,000 people die in traffic accidents each year, according to the National Highway Traffic Safety Administration.¹ This doesn't include the millions of accidents and injuries.

If you're a problem driver, your risk of dying during the life insurance term goes up. Increased risk means increased life insurance rates.  

Some term insurance companies ask about your driving record. Others won't. But even when they don't, the companies can still access your record through the Department of Motor Vehicles, so be honest about reporting your past violations.  

Many companies are only interested in your recent driving record. Some will be lenient if you've had no more than three violations in the past three years, or a DUI more than five years ago.

 

2. Family History and Affordable Term Life Insurance

Many term insurance carriers look at your family's medical history. This helps them identify potential genetic risk of dying. Typically, they look at the history of parents and siblings. You might be healthy today, but genetically vulnerable to develop a deadly condition during the life insurance term.  

The red flags they look for include cancer, coronary artery disease, diabetes and stroke. How they weigh these factors varies. Some disregard them completely if the conditions didn't result in the death of a family member before age 60.  

 

3. Recreational Activities and Term Life Insurance Rates

Recreation that is inherently risky increases your risk of dying. Higher risk can mean higher term life insurance rates. Some high-risk activities include sky diving, hang gliding, scuba diving, rock climbing, extreme sports, motor sports, auto racing and private aviation.  

A high-risk activity doesn't automatically label you high risk. Term insurance carriers assess how often you do the activity, your experience, and whether or not you are licensed/certified.  

 

4. Occupation and Affordable Term Life Insurance

Similar to high-risk recreation, your occupation can prevent you from getting affordable term life insurance. Industries with high risk include fishing, mining, construction, forestry, agriculture and transportation.  

In the case of high-risk recreation and occupations, some term life insurance policies contain exclusions. Excluding the high-risk factor means the policy won't pay if you die while engaged in that particular activity or occupation.

 

An exclusion could mean affordable term life insurance is still possible. If your goal is to protect your loved ones, however, you could be making them vulnerable with an exclusion. Cheap term life insurance is wonderful, but not if it means your loved ones would face financial hardship if you die.

 

5. Credit History and Cheap Term Life Insurance

What does credit have to do with cheap term life insurance? The companies who check credit often want to know more about your financial history, financial responsibility and determine if you are likely to pay premiums.  

On a final note, carriers use different criteria to determine your term life insurance rates, so what matters to one might not matter to another carrier. The best thing to do is to talk to an agent and compare term life insurance rates. Ask questions and most important, get coverage as soon as possible. Insure yourself and ensure peace of mind!

To talk to a Matrix Direct agent, call 1-800-914-8376 or request a free term life insurance quote.

1. National Highway Safety Administration, "Early Estimate of Traffic Fatalities in 2010," April 2011 http://www-nrd.nhtsa.dot.gov/Pubs/811451.pdf