The standard New Year’s resolution of finally getting around to applying for life insurance combined with the extra weight that most put on coming through the holidays sets up the perfect storm for many to overpay. Packing on that extra ten pounds of holiday weight from the end of November through the first half of January can actually lead to several hundred, if not thousands, in unnecessary additional premiums.
Most of these “resolution makers” are unaware of the impact that the combination of their height and weight will have on their life insurance premiums, being that they are finally committing to take that step forward to pursuing the application of their first ever life insurance policy that they had been putting off for years. Although it is great that to finally get over the hurdle of putting this important purchase off for years, it just may be worth it to put it off for a few more weeks until the normal weight is reached.
Finding out whether or not it is the best time to move forward with a policy now or waiting to burn down that extra weight is actually pretty easy.
Step 1 – Move forward with getting a life insurance quote with a licensed life insurance agent. When doing so there will be a series of medical and personal questioned asked to determine the rating classification for the application.
Step 2 – Request that the agent provide the classification that is being quoted (preferred plus, preferred, standard plus, or standard) and if there are any other classifications that would provide a better premium.
Step 3 – If there are other classifications available, inquire into the maximum weight that is allowable to obtain the better rate classification and if there are any other medical or personal factors that would prohibit the better rating.
Step 4 – Request the monthly rate of the better rated classification.
Step 5 – Subtract the current available premiums from the better rated classification, multiply the difference by twelve and then again by the number of years of the policy term.
Example: 50 Year Old, Male, 30 Year Term, $500,000 in Coverage – 5′ 10″
Post-Holiday Weight 210 lbs. – Currently Eligible for “Preferred” at $187.91 per month
Regular Weight 200 lbs. – “Preferred-Plus” $155.97 per month.
$187.91 – $155.97 = $32 potential monthly savings
($32 potential monthly savings x 12 months per year) x 30 years term = $11,520 overall savings
Overall potential savings varies significantly based upon the age of the applicant, length of the policy term, and the limit of coverage but in many cases the overall difference in the total of payments is substantial.