How Your Financial Situation Affects Your Life Insurance Rate

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Today’s guest post comes to us from Denise Manchini. Denise is a manager with AccuQuote.com, a leading Life Insurance Quotes company, providing free term life insurance quotes from some of the top-rated insurance companies in the United States. To learn more about her website, please visit the link above.

For most of us, the economy has hit our pockets hard. Trying to make ends meet, who hasn’t missed a few credit card payments here and there? You may think nothing of it, but your life insurance carrier sure does.

Besides looking at your health profile and driving record, life insurance companies look at credit scores to assess the amount of premiums you need to pay. This means that if you have been late on making payments, maxed out your credit card or filed for bankruptcy, the amount of life insurance premium you would need to pay could skyrocket. In some underwriting processes, having a bad credit score could double your premium amount!

Is there any logic behind this? Insurers say there is a link between a bad credit score and the cost of insuring someone. When compared to customers with a good credit history, customers who have a poor credit score are more likely to make a claim on a policy. Experts believe that if you are not good at managing your finances, you may not be good at maintaining good health and fitness. Therefore, a low credit score just might push your premiums significantly higher than you expected.

What should you do if you think your financial situation could impact your life insurance rate?

• The obvious thing to do is to try to make your credit card payments on time in order to maintain a high credit score.
• If you have already filed for bankruptcy, your existing life insurance policy should still be in effect to protect your loved ones. If it is a permanent life insurance policy, you may be given a part of the cash value for your personal expenses. However, if you do not have a life insurance policy, it is worth paying the higher premiums to get your life insured. Think of what would happen to your family if you were to die a premature death. Being financially protected by a life insurance policy could clear all your debts and leave your family in a good financial position to pursue their dreams and ambitions.
• Realizing that the economy is struggling, many life insurance carriers look favorably on people who have low credit scores. Their underwriters look into your credit score history in more detail to check for patterns in your payments. After reviewing your case, they may be able to offer you lower premiums than other life insurance companies.

In spite of your financial situation, you can still find the best rates through online life insurance quote providers. Make sure you are using a BBB-accredited site for a safe experience. Such providers have access to hundreds of reputable life insurance carriers. Fill in the questionnaire and allow a few seconds to run your criteria through their databases. Within moments you’ll receive the most competitive life insurance quotes that best suit your needs and pocket. Remember, where life insurance is concerned, even a little coverage is better than no coverage at all.

According to Donald Hanson of the National Association of Independent Insurers, “Research indicates that people who manage their personal finances responsibly tend to manage other important aspects of their life with that same level of responsibility and that would include being responsible behind the wheel of their car or being responsible in maintaining their home.”


How about you all? Do you agree that your credit score and the way you handle money should be reflected in ancillary activities such as your job or credit score?


Share your experiences by commenting below!


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