Insurance: What is Your Life Insurance Risk Profile?

Life insurance is an important part of every financial and estate plan. What if you were unable to obtain life insurance at a price that makes sense… or even to get it at all? It could happen.

The key is to qualify. To obtain life insurance, you must provide evidence of insurability on a range of health, medical, lifestyle and other risk factors through a process known as underwriting. You can influence some of these factors; others you cannot. Knowing your personal life insurance risk profile and what you can do to lower it will help you get insured at rates that fit your budget.

Here are a number of important underwriting factors to consider:

Alcohol and drug use. If you have been treated for using these substances or are a recreational drug user, it will drastically affect your insurability and rates.

Smoking. Smoking costs. And that includes any product that contains nicotine such as chewing tobacco, a pipe, cigars and even a nicotine supplement like a patch or gum.

Health factors. The risk of insuring you goes up with your blood pressure and cholesterol levels as well as other medical conditions such as stroke, respiratory disorders, previous surgeries, HIV or AIDS and even your mental health.

Family history. Studies have proven that many medical conditions are hereditary – especially cancer and cardiovascular disease. Even if you are in terrific physical condition and your parents or a sibling died of cancer or a heart attack prior to age 60, the insurance company considers you to be of higher risk.

Financial situation and history. The insurance company doesn't want you to purchase excessive coverage. Such financial factors as your net worth, assets and liabilities, and income level will affect the amount of coverage you can obtain.

Credit history. If you have poor credit or a bankruptcy in your past, insurers are concerned you may not be able to continue paying your insurance premiums.

Driving record. Your insurability can be seriously affected by multiple driving violations, accidents or convictions, especially if you were driving under the influence of drugs or alcohol.

Hobbies/Avocations. The insurance industry considers certain hobbies or avocations – such as scuba diving, motor vehicle racing, skydiving, mountain climbing, and any type of flying - to be of high risk. If you engage in any of these, your premiums are bound to skyrocket.

Travel. If you're adventurous and travel to countries associated with higher insurance risk, your rates are likely to rise.

Although insurance companies can be very strict about who gets their best rates, insurers do vary in what they view as acceptable risk - so it pays to shop around.

A professional financial or insurance advisor can help you get the life insurance coverage you need at a price that fits your budget.

(Submitted by Damon Smith, Investors Group Financial Services Inc.) For more information call 888.335.1362.

This column, written and published by Investors Group Financial Services Inc.(in Quebec – a financial services firm), is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant. Insurance products and services offered through I.G. Insurance Services Inc. (in Quebec, a financial services firm). Insurance licence sponsored by The Great-West Life Assurance Company (outside of Quebec).

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