Investigators from the New York State Department of Financial Services have determined that life insurers in the state have been holding back more than $52 million in life insurance benefits to the survivors of deceased policy holders — in some cases for as long as 40 years. This practice, however, is not limited to New York.
While it’s true that being a smoker will impact the cost of your life insurance premium, and being a heavy smoker can even force you into really expensive no-exam types of policies, it is actually possible for smokers to obtain life insurance.
Interestingly, they type and frequency of your smoking habit can actually affect your rate. For example, a pack-a-day smoker is going to pay a lot, even if they don’t have to get the more expensive policy where medical questions aren’t asked, but someone who only smokes the occasional cigar (and by occasional, insurers mean no more than one a month), will likely not have any issues getting premium coverage, and the same is true for people who use smokeless tobacco in moderation.
Congratulations! You’ve made the leap, and chosen to apply for a life insurance policy. However, you’ve been told that the insurance company requires a medical exam, which they pay for. For most people, this is not a big deal – the exam generally consists of urine and blood samples, blood pressure readings, measurements of your height and weight, and a questionnaire.
The answers you provide will determine your health class, which, in turn will determine your insurance rates, so it’s important to get the best results possible. How do you do that? Here are a few tips:
- If possible, fast for eight hours before your exam for more accurate blood test results. Schedule appointments in the early morning to help with this.
- If you cannot fast, avoid caffeine, and eat lightly. Decaffeinated coffee is fine, along with a light breakfast or lunch.
- Avoid salt for three-four days before your exam, especially if you sometimes have blood pressure issues.
- Abstain from drinking alcohol for 24 hours prior to your exam, since alcohol tends to elevate blood pressure for 12 to 24 hours.
- Get a good night’s sleep before the exam.
- If you’re a smoker, don’t smoke within half an hour of the exam, as smoking also tends to constrict artery walls and elevate blood pressure.
- If you’re suffering from an acute illness, such as the flu – or even an ear infection – consider rescheduling the exam, as some illnesses can affect the blood and urine tests.
- If you’re female, and menstruating at the time of the exam, be sure to tell the exam technician, as this can affect your urine sample. They’ll be able to put a note on the lab slip.
Most importantly, be certain that you are completely accurate on the questionnaire. If you’re caught in a lie, your entire policy could be voided.
Most of us never shop for life insurance, relying solely on the coverage we get through our corporate benefit packages, or if we do purchase a life insurance policy, we make payments but never think to upgrade or alter our coverage.
The folks at LIFE, the Life and Health Insurance Foundation for Education want all of us to rethink that habit. According to them, it’s not just the obvious life changes – like getting married or divorced, or having a baby – that should prompt a closer look at our policies. So what are all the changes that should trigger insurance examination?
Here’s the list:
- Getting married – because now there are two lives to insure.
- Having a child – this involves a change in beneficiary, as well as covering the new addition.
- Buying a home – it increases your net worth, even if it doesn’t always feel like it. And you need to make sure your spouse can meet the mortgage payments without your income
- Adding debt – whether it’s a loan for home improvements or a new car, you’ll want to make sure your life insurance is a resource if you get in over your head.
- Changing jobs – your coverage doesn’t necessarily follow you.
- Changes within your business – if you have to hire people with special skill sets, that could increase the bottom line of the benefits you offer.
- Supporting aging parents – you can’t claim them as dependents, but you can incorporate their financial needs into your life insurance plan.
- Changes to your marital status – if you divorce or become widowed, you need to consider the future for yourself, and any children.
- Planning for college – some life insurance plans are designed to be cashed out to help your child pay for school.
- Planning for retirement – after paying into it for decades, will your life insurance give you any kind of income? Or at least ensure that those you leave behind are not incurring your debt?
As you can see, there are many life changes which can affect life insurance – don’t wait to examine your policy, and alter it to suit current or future needs.