As a company owner, life insurance for business owners is important as if something happens to you, the people who depend on you and your income, such as your spouse or children, not only lose you but also the support funds they live off.
So, it's very important that you get sufficient cover to help them, should you have accident and aren't around anymore. If you're looking at getting life insurance, there are some key things which will affect your ability to get this insurance and how much it will cost you.
When it comes to securing life insurance, your health plays a vital role in determining your premiums. Your medical history, lifestyle, and even your genetic makeup can influence how much you pay for coverage.
In this article, we'll explore the complex relationship between health and insurance, and reveal how insurers use this information to assess risk and set premiums.
Health history
If you have a history of medical conditions like cancer or heart disease, you can expect to pay a lot more for your premiums. Insurers will also scrutinize your cholesterol levels, blood pressure, weight, and other health metrics to determine your risk level and consequently, the cost of your policy.
But here's the kicker: even if you're currently in good health, your family history could still have an impact on your premiums. That's right! If a specific illness runs in your family, you could end up paying more for your policy.
To keep your premiums low, be sure to prioritize your health and take appropriate steps to manage any existing medical conditions. This includes making healthy lifestyle choices, seeing your doctor regularly, and following any prescribed treatment plans.
Age
Age is just a number – until you're applying for life insurance. The harsh reality is that the older you get, the higher your premiums will be.
For example, a 45-year-old can expect to pay up to three times more for a life policy than a 25-year-old. This explains why it's recommended to get coverage during your early years, especially if you’re planning to take out the permanent plan.
While term coverage may seem like a more affordable option, it can get costly when it comes time to renew. That's because the renewal premiums will be based on your age at that time, which could be significantly higher than when you first took out the policy.
Gender
Apart from the usual factors like the medical history and age, gender also plays a role in determining premiums. In fact, it's the second biggest factor after age.
So, why do men often end up paying more than women? Well, insurance companies use statistical data to determine how long someone with a specific profile is likely to live, and unfortunately, the numbers show women outlive men by up to five years.
Along with this, women don't take out life insurance policies at the same rate as men. Perhaps it’s due to societal expectations that women don't need to worry about finances or the common myth that only breadwinners need life insurance.
But the truth is, life insurance is important for everyone, regardless of gender. It provides financial protection for your loved ones in the event of your unexpected death, and can help cover costs like funeral expenses and outstanding debts.
Smoking
Smoking is a serious health risk that can lead to numerous problems, including heart disease and lung cancer. Insurance companies know this all too well and they charge smokers up to 20% more for the same policy as non-smokers.
This penalty applies even if you're otherwise in good health. And it's not just cigarettes that count: cigars and vapes also make you a higher risk. Even occasional smoking can lead to higher premiums.
If you‘re serious about saving money on life insurance and improving your health, then quitting smoking is the way to go.
Occupation
When it comes to life insurance for business owners, anyone working jobs that come with a high degree of physical risk such as construction workers, miners, and truck drivers is likely to pay more in life insurance premiums than those in less risky professions.
As a result, insurance companies often charge higher premiums to individuals in these professions to account for the increased risk.
However, it's not just physical danger that insurers consider. Certain jobs, like pilots or air traffic controllers may also be deemed higher risk due to the potential for stress and mental fatigue, which can lead to health problems down the line.
On the other hand, those in low-risk occupations, such as office workers or teachers, may be eligible for lower premiums due to the reduced risk of accidents or injuries.
Lifestyle
If you're the type of person who enjoys living life on the edge, engaging in activities like drag racing and paragliding, your insurance provider may view you as a higher risk than someone who spends their spare time curled up with a good book or going for a leisurely jog.
As a general rule of thumb, anything that increases your chances of dying, no matter how small, can result in higher premiums.
Conclusion
As the saying goes, your health is your wealth. This has never been truer than when it comes to life insurance for business owners premiums. To save money on your policy, start by prioritizing your health today.
So, next time you hit the gym or choose a healthy meal over fast food, remember that you're not just doing it for yourself, but also for the financial security of your loved ones.
