How To Get A Better Rate On An Existing Life Insurance Policy If Your Health Has Improved

Were you in less-than-perfect health when you applied for and bought life insurance coverage? Maybe you wanted to lose weight, had blood pressure that was a high or had a smoking habit you needed to kick. But you didn’t want to delay getting coverage in hopes of improving your health.

If so, you likely didn’t get the best available rate from your insurer. That’s because your health has a big impact on the amount you pay for coverage.

The good news, though, is that you might be able to get a lower rate if your health has improved since you bought the policy. Many insurers allow for what is called a reconsideration or re-rating.

The reconsideration process can be worth your while if your rate is lowered. Here’s how to increase your chance of success.

How Insurers Determine Your Rate

Insurers consider a variety of factors when deciding how much they will charge for coverage. Two key factors are your age and health. Typically, the younger and healthier you are when you apply, the lower your rate will be.

You likely remember filling out a long application when you applied for coverage that asked about your age, gender, personal medical history and mental health, family medical history and whether you were a tobacco user. There might also have been questions about your job, your income, your driving record and whether you had any dangerous hobbies.

The insurance company verified the information you provided and gathered additional information about you through its underwriting process. The process can vary, but it can include collecting the following information:

1. Your medical records

2. Your prescription drug history

3. Your motor vehicle report

4. Information available in public records

The insurer also might have required you to take a life insurance medical exam to determine if you had any conditions that would affect your life expectancy. It then used all this information to determine your underwriting, or risk, class. Using tobacco, being overweight, having high blood pressure or chronic health conditions such as diabetes are among the things that life insurance companies consider to be risk factors. If you had risk factors when you applied, you probably didn’t qualify for the best underwriting class with the lowest rate.

Reasons You Might Qualify for a Lower Rate

A change in your health since you purchased a life insurance policy might qualify you for a better underwriting class. For example, losing weight, improving your cholesterol level or lowering your blood pressure could help you get a lower rate, says Paya Schlass-Epstein, a customer success manager at Haven Life, a MassMutual-backed life insurance agency.

Insurers typically are willing to retest for factors that were considered during an initial life insurance medical exam, Schlass-Epstein says. They’ll also consider lifestyle changes such as quitting smoking.

But before getting a rate reconsideration you’ll need to show that you have sustained the improvement. For example, you’ll need to have kept the weight off or quit smoking for a certain period of time, as defined by the insurer. For example, you may need to show you have maintained weight loss for a least a year before your rate can be reconsidered.

If you have a more complex medical condition—say, cancer that has been treated—you likely will have to wait a longer period before an insurer will reconsider your rate. Depending on the condition, the insurer might not even be willing to consider a rate change despite changes to your condition.

How to Get Your Insurer to Reconsider Your Rate

It’s up to you to ask your insurance company to reconsider your rate. When you call the company, you likely will be asked what has changed about your health or lifestyle to determine whether it’s worth your effort to go through the reconsideration process, Schlass-Epstein says. “We don’t want customers going through the whole process of taking another exam and finding out they couldn’t get a better rate,” she says.

That’s right: You’ll have to have a medical exam. It will involve checking your weight, pulse and blood pressure and taking blood and urine samples. Check with the insurer to see if it will cover the cost of the exam. Haven Life, for example, does cover the cost. Not all insurers will.

If you’re seeking a lower rate because you quit smoking, you likely just have to provide a urine sample, Schlass-Epstein says.

You’ll also have to fill out a questionnaire again. Also, the insurer will likely check your prescription history, medical records and driving record.

How to Prepare for a Medical Exam

If you’re going to go through the effort of getting a medical exam, you’ll want to make sure you get the best results possible. Take the following steps to prepare. 

a. 24 hours before the exam: Limit salt and high-cholesterol foods. Avoid over-the-counter medications such as antihistamines and nasal decongestants. Avoid nicotine.

b. 12 hours before the exam: Avoid alcoholic beverages and strenuous exercise, which can raise blood-pressure levels. Avoid caffeine.

Also, ask whether you need to fast. The paramedical company that conducts the exam might want you to avoid eating and drinking anything other than water during the 12 hours before your exam. Here are more tips for preparing for a life insurance medical exam.

How Much You Could Save

Depending on how much your health has improved or the lifestyle changes you’ve made, the change to your rate can be significant. For example, a 31-year-old female in good health who stopped smoking saw a 57% reduction in her premium on a 10-year, $250,000 term life policy from Haven Life. Her monthly rate dropped from $34.33 to $14.75.

A 37-year-old female was paying $61.96 per month for her 20-year, $750,000 Haven Life term policy. She made some lifestyle changes that improved her overall health and lowered her cholesterol. After completing another medical exam, her rate fell to $38.41 per month.

What Happens if Your Health Has Changed for the Worse?

Although you might have improved one aspect of your health, there’s always the chance that your medical exam for a rate reconsideration will reveal that you’ve developed another condition. Fortunately, that won’t force you into a worse rate class. Typically, a reconsideration will result only in the same or a lower rate, Schlass-Epstein says.

You might run into a problem if you failed to disclose a condition that you knew you had when you originally applied for coverage and the new exam detected it. If the insurer determines that your application has a material misrepresentation (in other words, if you lied), you could lose your coverage. 

The Benefits of Reconsideration vs. Reapplication

The benefit of asking your current insurer to reconsider your rate rather than shopping around for a new policy is that your age won’t be a factor in the new rate. The rate will be based on your current health and the age you were when you bought the policy—not your current age, Schlass-Epstein says.

Your current age would be taken into consideration if you were to apply for a new policy. Even if your health has improved, you might actually have to pay a higher rate if it’s been several years since you first got coverage. Keep this in mind if your insurer doesn’t lower your rate after a reconsideration and you want to shop around for a new policy.

If you do decide to apply for a new policy, don’t cancel your existing policy until you’ve been issued a new one, to make sure you’ve locked in coverage.

Source: https://www.forbes.com/advisor/life-insurance/rate-reconsideration/