Life Insurance: Should I Quit Smoking?

To your Greensboro life insurance provider, the most important concern when underwriting a life insurance policy is if you, the policyholder, are at risk of suffering a premature death.  Risk level is what determines the cost of any insurance policy and, where life insurance is concerned, whatever behaviors you exhibit may play into the formula used to determine whether you qualify for coverage from a particular insurer and at what price.

Following are some of the major factors that figure in to determining life insurance rates.  Some of these are criteria over which you have no control, such as age and gender, while others are lifestyle choices over which you have complete control:

• Age - you have no control over this main factor determining premium rates.  Older people are more at risk of dying sooner.  Young people are more likely to live longer and to pay premiums for a longer period of time.  
• Gender - statistically, females live longer than males and therefore have less risk to insurers of premature death.
• Smoking - any tobacco use, whether cigarettes, cigars, pipes or chew, has been shown to foster numerous health problems.  Smokers can sometimes pay twice as much for their coverage as nonsmokers.  This includes vaping and using nicotine gum, patches and even marijuana.  Quitting smoking not only saves on the cost of life insurance but also on the costs of buying all the smoking materials.
• Health - during most life insurance underwriting, a medical exam is required where certain vital information is recorded such as height, weight, cholesterol level, blood pressure, etc. While "no exam" policies may be available, coverage costs may be higher.
• Lifestyle - any risky pastimes such as motorcycle racing or mountain climbing will likely make a life insurance policy more expensive.  Dangerous occupations such as mining, fishing, or logging may also be considered risky by your Greensboro life insurance policy provider and will add to your cost.
• Family Medical History - if you have a family history (parents/siblings) of serious medical conditions which may have contributed to a premature death, this may factor into higher premium rates.
• Driving Record - insurers may look at your driving record to see if you exhibit any risky driving behavior.

Change What You Can

Not much you can do about several of the above factors, but smoking is something you can stop.  You should.  Save on insurance and prolong your life.

Reconstruction Cost Versus Market Value

When buying homeowners insurance, it's important to make sure you get the correct type and amount of coverage.  While it's not especially common for people to have too much homeowners protection, it's not uncommon at all for them to be underinsured.  In fact, according to current statistics, nearly two out of every three homeowners in America (59%) have homes that are underinsured.  It's been found that the average homeowner today only has enough insurance coverage to pay for 78% of the replacement or reconstruction cost of their home if it was to be destroyed by a covered loss such as a house fire.

Reconstruction Cost Versus Market Value

You may be surprised, as many are, that your homeowners insurance protects your home for a greater amount than you thought the property was worth (market value).  If so, you likely have a more realistic amount of protection than those homeowners who are underinsured, as most are.

"A more realistic amount of protection" means enough coverage to rebuild your home to like or original standards at today's costs for labor and materials within your particular geographical area.  This amount represents the actual reconstruction cost.

Unfortunately, most US homes are insured based on a property's market value rather than their cost of reconstruction.  With today's increasing prices for building materials and labor, it's continually becoming more expensive to rebuild a home than it initially cost.  You also have to factor in changes in building codes that require costly upgrades.

Why Underinsuring is so Common

One major concern with homeowners insurance coverage is that policyholders don't periodically update or increase the coverage on their homes.  Whenever remodeling or home improvements are done to your home, you should call up your agent and revisit your policy's coverage. 

Just the fact that building materials and labor costs continue to increase year over year, that annual or semi-annual update to your homeowners policy becomes imperative to ensure you maintain appropriate coverage on your home in advance of any catastrophe.

Additional (Optional) Coverage

When going over your policy specifics during your annual update, you may want to investigate these additional coverages to bring your policy in line with your reconstruction needs:

• Replacement cost coverage
• Building code/ordinance coverage
• Automatic inflation guard
• Extended replacement cost coverage
• Additional living expense coverage

Most policy holders surveyed report that they have not added or are not sure if they've added these important protections.