One of the biggest misconceptions about buying life insurance is that everyone of the same age pays roughly the same price.
They don’t.
Insurance companies use a process called underwriting to evaluate risk and determine whether they can offer coverage and, if so, at what rate.
Understanding this process can make shopping for life insurance much less confusing.
What Is Life Insurance Underwriting?
Underwriting is the insurance company’s process of evaluating an applicant’s risk profile.
Depending on the company, policy, coverage amount, and applicant, underwriting may consider information including:
- Age
- Height and weight
- Medical history
- Prescription medications
- Blood pressure
- Cholesterol
- Tobacco and nicotine use
- Family medical history
- Driving history
- Occupation
- Hobbies
- Financial information
- Alcohol or substance-use history
Some applications may require a medical exam, while others can use accelerated or simplified underwriting.
Your Health Matters—But It Isn’t the Only Factor
Someone with excellent health may qualify for a preferred underwriting class and potentially receive a lower premium.
But having a medical condition doesn’t automatically mean you can’t get life insurance.
Insurance companies evaluate medical conditions differently.
One carrier might view a particular condition more favorably than another. That’s one reason working with an independent insurance professional who can compare multiple carriers can be helpful.
Lifestyle Can Affect Rates Too
Health isn’t the only consideration.
Certain activities and occupations can affect underwriting.
Examples might include aviation, scuba diving, mountain climbing, racing, or other higher-risk activities.
Your driving history can matter as well.
Multiple serious driving violations could affect how an insurance company evaluates the application.
Tobacco and Nicotine Can Make a Major Difference
Nicotine use is another major factor in life insurance rates.
Cigarettes, cigars, vaping, chewing tobacco, nicotine replacement products, and other forms of nicotine may be treated differently depending on the insurance company.
The important thing is to be accurate on the application.
Never hide health or lifestyle information in an attempt to obtain a better rate.
What If You Don’t Want a Medical Exam?
The life insurance industry has changed significantly.
Many insurers now offer no-exam life insurance or accelerated underwriting for qualifying applicants.
Instead of requiring bloodwork and a physical examination, an insurance company may use electronic health records, prescription databases, and other authorized information.
However, “no exam” doesn’t mean “no underwriting.”
The insurance company is still evaluating risk.
Why Working With Multiple Carriers Matters
This is an area where shopping intelligently can make a real difference.
Insurance companies have different underwriting guidelines and areas where they may be more competitive.
Someone with diabetes, for example, shouldn’t automatically assume that every insurance company will offer the same decision.
The same applies to build, blood pressure, medications, family history, and many other underwriting factors.
The goal isn’t simply to find the company with the lowest advertised price.
It’s to find the life insurance company whose underwriting guidelines fit your individual situation.
