Term Life Insurance Articles
When A Policy Holder Genetics Raise The Cost Of Term Life Insurance
2010-03-24
In theory, term life insurance coverage should be reasonably priced and accessible to all. Sadly, this is often not the case. Term life insurance quotes are frequently based on factors other than simply a person's medical and treatment history - in life insurance age, location or even genetics can be the basis of a premium rate. Someone with a predisposition to a genetic or hereditary disorder can be at risk of paying far higher premiums than the average, or being rejected altogether.
Many insurance companies are now asking clients to provide either a detailed medical history or access to medical and doctor's records. Ostensibly, this is done to speed up the approval process without the need for a medical exam. Instead, these records are often sifted through to find evidence of any preexisting condition or one based on genetic factors. This leads insurance providers to raise rates based on the possibility of an illness. Because insurance companies operate on the basis of risk assessment, their argument for this policy is that someone with a genetic predisposition to potentially fatal or long-term illness, places them in a position of greater risk to insure, as there is a higher chance that the insurance provider will be required to pay out. This, in turn, leads to a higher insurance premium.
Most states now have legislation which prevents companies from using such items as a basis for rate decisions, but not every law is clear-cut and not every company is compliant. Whenever a client obtains a term life insurance quote, it is best to do two things before making a purchase. The first is to obtain another, competing insurance quote so that they have something to bargain with. The second is to call the prospective insurance company and determine what they expect in terms of documentation or medical exams. If the company wants access to previous medical documentation which is not relevant to a current, ongoing condition, consider not choosing this provider for your insurance, as they will likely make their coverage decisions based on a potential threat of illness, rather than a present one.
While the ultimate goal is to have all term life insurance companies provide quotes to clients with only their current concerns factored in, this is a situation which is still far from being a reality. Term life insurance providers still base their decisions on the genetics of policyholders, especially if there has already been a death in the family due to an illness of a similar nature, or if the likelihood of a disease emerging is high. Being prepared to deal with insurance companies on this basis can result in a lower premium, ideally one based solely on your current circumstances.
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In theory, term life insurance coverage should be reasonably priced and accessible to all. Sadly, this is often not the case. Term life insurance quotes are frequently based on factors other than simply a person's medical and treatment history - in life insurance age, location or even genetics can be the basis of a premium rate. Someone with a predisposition to a genetic or hereditary disorder can be at risk of paying far higher premiums than the average, or being rejected altogether.
Many insurance companies are now asking clients to provide either a detailed medical history or access to medical and doctor's records. Ostensibly, this is done to speed up the approval process without the need for a medical exam. Instead, these records are often sifted through to find evidence of any preexisting condition or one based on genetic factors. This leads insurance providers to raise rates based on the possibility of an illness. Because insurance companies operate on the basis of risk assessment, their argument for this policy is that someone with a genetic predisposition to potentially fatal or long-term illness, places them in a position of greater risk to insure, as there is a higher chance that the insurance provider will be required to pay out. This, in turn, leads to a higher insurance premium.
Most states now have legislation which prevents companies from using such items as a basis for rate decisions, but not every law is clear-cut and not every company is compliant. Whenever a client obtains a term life insurance quote, it is best to do two things before making a purchase. The first is to obtain another, competing insurance quote so that they have something to bargain with. The second is to call the prospective insurance company and determine what they expect in terms of documentation or medical exams. If the company wants access to previous medical documentation which is not relevant to a current, ongoing condition, consider not choosing this provider for your insurance, as they will likely make their coverage decisions based on a potential threat of illness, rather than a present one.
While the ultimate goal is to have all term life insurance companies provide quotes to clients with only their current concerns factored in, this is a situation which is still far from being a reality. Term life insurance providers still base their decisions on the genetics of policyholders, especially if there has already been a death in the family due to an illness of a similar nature, or if the likelihood of a disease emerging is high. Being prepared to deal with insurance companies on this basis can result in a lower premium, ideally one based solely on your current circumstances.
