Bad Driving Can Affect Your Life Insurance Premiums

Other Surprising Factors That Can Raise Your Life Insurance Costs

Bad Driving Can Affect Your Life Insurance Premiums
February 24, 2016

If you collect speeding tickets like a magnet collects metal and are on a first-name basis with the staff at your local body shop, it should be no surprise that you pay a lot more for auto insurance. However, that established history of reckless behavior and poor judgment can also affect other things — like the rate you pay for life insurance.

Most insurance consumers do not think about the crossover effect between factors that affect different types of insurance, but the effect really should not be a surprise. Insurance is based on risk, and certain risks apply to multiple aspects of life. Certainly, nobody would be surprised to find out that many factors that affect your health insurance also affect your life insurance... or would they?

LIMRA recently released information on the 2015 Insurance Barometer, which included a survey asking consumers to identify factors that would affect their life insurance costs. Many results were expected, but a few were surprising. Below are the factors listed by LIMRA. The percentage indicates the percentage of people correctly identifying the factor as a life insurance risk.

  • Tobacco Use (85%) – The most recognized factor within the group. Perhaps the surprising part is that 15% apparently think smoking does not matter.
  • Age (82%) – Again, a fairly obvious factor leaving us scratching our heads about the other 18% of respondents.
  • Health/Medical History (78%) – It may not matter for health insurance anymore, but it does for life insurance.
  • Heavy Alcohol Use (75%) – A solid majority understand the risks associated with heavy drinking and the toll it takes.

  • Current Health (74%) – See Health/Medical History above.
  • Weight/Height Ratio (73%) – Unfortunately, with American obesity becoming an epidemic, this factor is taking on increasing importance.
  • Family Health/Medical History (64%) – You may consider that unfair, but certain family traits and genetic factors are well known to affect lifespan. Life insurance underwriters are not in the fairness business, they are in the risk assessment business.
  • Occupation (54%) – While this does not seem like it might be a factor, except for the most dangerous occupations, each occupation has its own set of assessed risks, whether it's riveting beams on a skyscraper or sitting eight hours a day staring at a computer screen.
  • Gender (49%) – Sorry, guys, it’s nothing personal. Men simply just do not live as long as women, and at certain stages of life, they are known to engage in riskier activities.
  • Lifestyle/Hobbies (49%) – It is a bit surprising that more people do not recognize risk factors associated with a lifestyle or a hobby. As with occupations, some activities are inherently dangerous, like cliff-diving or base-jumping, but all activities have some level of risk to assess. After all, knitters use large needles....
  • Driving Record (36%) – As mentioned above, bad judgment and risky behavior in driving suggests similar behavior in other potentially risky (thus life-threatening) activities.
  • Credit History (34%) – Another area of assessing judgment. Overextended credit implies bad decisions on several levels.
  • Less Underwriting (27%) – Less underwriting basically means a lesser assessment of your factors. From the viewpoint of an underwriter, the less that is known about you, the higher of a risk you pose. You may be considered an even greater risk once you are fully assessed, but the effect of the unknown cannot be ignored.

How many of those factors did you identify? If you fall into the higher risk category in any of these factors that you can alter, seek a positive change. You are likely to save money in more than just one insurance category.


Photo ©iStock.com/Manuel Faba Ortega

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Sarah | 10.06.15 @ 16:32
This is an interesting breakdown of the things that change our premiums.
Beverly | 10.06.15 @ 16:32
The credit history and less underwriting were ones I wouldn't have thought of, but after reading the descriptions it make sense. Interesting article.
Erin | 10.06.15 @ 16:33
It's interesting how many things factor into obtaining life insurance. Since everyone will eventually die, aren't we all at risk?
Tina | 10.06.15 @ 16:33
Wow! That's a lot of factors. Some are obvious but I didn't think about some of them like credit history and underwriting.
Irene | 10.06.15 @ 16:33
Ours is one of those "rates stay the same for life" plans
Steffanie | 10.06.15 @ 16:33
Very detailed list. I was surprised by a few.
Elaine | 10.06.15 @ 16:36
Interesting article and breakdown.
Carla Truett | 10.06.15 @ 16:36
I'm surprised by some of these. I'm going to forward this to my Sis because her driving is awful.
Angie | 10.06.15 @ 16:38
There are certainly a lot of factors that are looked at by the insurance companies. Wonder if there are others not on this list - like geography and more specific demographic info...
Nancy | 10.06.15 @ 16:38
Unfortunately, I think most of them make sense. I'd have to learn more for the reasoning of the credit history effecting the insurance rates to include it.
Zanna | 10.06.15 @ 16:40
So most folks are just a google search away from raised premiums or insurance cancellation.
Kathryn | 10.06.15 @ 16:42
Definitely really interesting, I will have to think of this when I get my new car here shortly!
Sara | 10.06.15 @ 16:45
I know for a fact that bad driving hurts insurance... My husband was bad at first and our insurance skyrocketed... It will go down a whole lot next month though.
Kamie | 10.06.15 @ 16:46
This is interesting, I would not have thought smoking would be a part of this.
Daniel Dohlstrom | 10.06.15 @ 16:46
I do think there are some things included that should not be but a great list of what you need to know
Meredith L | 10.06.15 @ 16:47
This is good information to pass on to my kids. They're all fairly new drivers and it sure could give them a leg up in the best ways to save for their future and be safe and healthy at the same time. Win-Win-Win
Steven | 10.06.15 @ 16:48
Sadly I know how bad driving affects insurance. However, did not know a lot of these.
Christina | 10.06.15 @ 16:52
Some of the information and criteria that they use to make determinations on your insurance costs are absolutely ridiculous!
Christina | 10.06.15 @ 16:54
Interesting breakdown. I didn't think credit history or underwriting would be a factor.
Clarissa | 10.06.15 @ 16:54
I'm am looking for different insurance and this is very helpful.
George Middleton | 10.06.15 @ 16:58
Makes sense after reading the breakdown like this. Some I wouldn't think of. Good information.
Britt | 10.06.15 @ 17:04
Well obviously, if you're a bad driver, then your insurance prices are going to rise.
Owen | 10.06.15 @ 17:10
All kinds of ways to raise our rates
Bobbie | 10.06.15 @ 17:14
None of this is surprising. Life insurance companies are out to make money and take every aspect of your life into consideration when figuring out premium for the coverage you want.
Heather | 10.06.15 @ 17:21
I do believe your driving record should affect how much you pay in premiums but some of the other factors are crazy!
Kyle | 10.06.15 @ 17:23
I have thankfully never been in an accident, but when my mom was - it messed up her premiums pretty bad.
Amanda | 10.06.15 @ 17:24
While this list is interesting, there's just too much that goes into a decision. Credit history and less underwriting... really. Everyone wants to look at credit history like its your life story and base you upon it, when marriages, divorces, lost of income all can dramatically change your numbers and fast. Before long if you have to travel for work by plane, or boat rates will sky rocketed for those people. Insurances of all kinds love to suck the money and life right out of you. and be aware of any fine print, most won't pay out for a ton of reasons.
Kailie | 10.06.15 @ 17:29
This has lots of interesting info. Insurance premiums can be tricky.
Alec | 10.06.15 @ 17:34
I wouldn't have thought of credit history affecting it. But I guess it makes sense on a psychological level. I would assume that stress from debt plays in to that too, referencing it back to past/current health. The others are fairly straightforward reasons.
Jo Ann | 10.06.15 @ 18:10
These are all interesting, but I too think credit history, and the underwriting shouldn't have any affect on your life insurance. But that is why I am not an insurance specialist because i don't see the relationship on life insurance, I could understand insuring a home and credit be an issue though.
Ambar | 10.06.15 @ 18:17
Credit history and less underwriting? I wouldn't have thought about those.
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