It’s a whole new year an time to think about the positive changes you will make in the coming year. Perhaps at the top of your list is losing weight or quitting smoking. Here is more incentive—it may also reduce your premium rates on your life and disability insurance.
When you apply for life and disability insurance, your rates are based on your health and risk criteria. People who smoke pay approximately 30-50% more on their life and disability insurance premiums. People who are overweight also pay more for their insurance.
But here is the good news. If you already have a life or disability policy that was rated due to smoker rates or due to build, you may apply to reduce those rates after the policy has been in force for one year. This would require new medical underwriting. Therefore, if you health situation has worsened since you took out your policy, it wouldn’t make sense to go through underwriting. However, if your health has improved, the company may reduce your rates. Once the rates have changed, the company can never increase them again in the future.
Take for example Set for Life Insurance client Dr. Samuel Matthews. He purchased his life and disability insurance policy in 2005 when he was finishing his surgical medical residency. “When I purchase my life and disability insurance, I was at a very unhealthy phase of my life. I was overweight and wasn’t sleeping well due to the conditions of medical residency.” His policies were rated since he was significantly overweight. In 2008, Set for Life discovered on an annual review call that Dr. Matthews was training for his first triathalon. “When I told Set for Life I was doing a triatholon, they immediately asked me my current weight to determine if I should apply to reduce my life and disability insurance rates. Sure enough, they were right! I was able to reduce them substantially!”
To remove smoker rates, companies like to see that you have been tobacco free for at least 1 year.
If your goal is weight loss, some companies may want to see the weight off and stay off for a period of 6 months to a year. Check with the company first. If you lost weight last year and were previously rated, you may want to send in an application for reconsideration.
For more information about how your 2013 New Year’s Resolutions will positively improve your life and disability insurance premiums, please contact the Set for Life Insurance office.
Please note the names and identifying client information have been changed to protect anonymity.