Life Insurance and Risk
Risk Types
Insurance companies view their customers as a risk. All potential insured are classified in accordance with the scope of risk they present. A person is viewed as a good or bad risk based on how safe it is to give him insurance. Most people who have no serious health problems may qualify for a company's standard rates. They are a so-called "standard risk." However, if you are healthy and sound and your physical condition is described as above average, then you are a "preferred risk" and may qualify for preferred rates, which are lower.
How to qualify for better rates?
It's quite difficult to change your risk type to get better rates, because not always you can change your health condition. Still, there are some things in your life that you can change for the better. For example, habits: not only will giving up smoking make you healthier but also improve your rating with the insurance company. You can also change some eating and leisure-time spending habits. By eating healthier and fat-free food and taking regular strolls you will be able to lower your cholesterol or get your weight down. All these contribute to your rating improvement. Among other factors which most insuring companies take into account when determining your risk type are:
- Blood pressure. A "preferred risk" is a person whose average, untreated blood pressure doesn't exceed 150/90.
- Cholesterol. A cholesterol ratio must not exceed 7 and cholesterol level - 260. For smokers these indexes must not surpass 6 and 250 correspondingly.
- Diseases. There must be no cases of cardiovascular disease, stroke, diabetes or cancer to qualify for a good risk. It also includes no family history of cardiovascular disease prior to age 60, for parents and siblings.
- Drugs or alcohol addictions mean lower rating.
- Weight. Weight must not go beyond health safety limits. Each insurance company sets these limits itself.
- There must be no flying as a private pilot or in aviation for two years prior to applying for policy.
Each insurer has its own standards, and the definitions of preferred risks are different from company to company. But, if you show improvements for some time, most insurers will consider that evidence of permanent improvement and will qualify you for preferred rating.
|
|
Types of Life Insurance
|
