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If only everything you had to buy were like life insurance. Comparison-shopping for policies is easy, and prices have been going down for more than a decade. For example, a healthy 40-year-old man paid at least $995 per year for a $500,000 term-insurance policy with a 20-year rate guarantee in 1994. Now, the same policy would cost him as little as $355.
And you don't have to be in the best of health to find good deals. Until recently, it was nearly impossible to buy life insurance if you had been diagnosed with cancer. Several years after completing treatment you might have been able to find a policy, but you would probably have had to pay two to three times as much as a healthy individual.
Today, however, some patients who have had breast or prostate cancer, as well as diabetes and coronary-artery disease, are eligible for policies at standard rates. But it helps to know which companies to work with and how to present your case.
Price wars. Competition continues to drive down premiums for term insurance -- especially because the Internet lets you compare prices. And with rates still falling, it pays to shop again even if you bought a policy fairly recently. You may find a lower rate (even though you're older), or you may be able to lock in the same rate for a longer period.
Medical advances and research are also helping to push premiums down. Studies have shown, for example, that excess weight makes you more vulnerable to serious illness. As a result, the Phoenix Cos. is now offering a 5% discount on its cash-value policies if your height and weight fall within an optimum range. Plus, Phoenix will shave another 5% off its premiums every five years if you stay within the healthy range, with a maximum discount of 20%.
"Maintain a healthy weight and your chances of developing high blood pressure, heart disease, stroke, type 2 diabetes and even some forms of cancer are reduced," says Joseph Kelleher, senior vice-president of the Phoenix Cos. "In terms of its negative impact on overall health, obesity could become the next smoking."
David Rollins saves more than $200 per year on his cash-value policy because he met Phoenix's standards, and he will continue to see his premiums drop if he keeps his weight down. That should be no problem for Rollins, 42, who watches his diet and exercises every day. "It's great to have a product that rewards the lifestyle I already follow," says Rollins, who lives in Bloomington, Ill.
New standards. Insurers have always rewarded individuals who are in good health with lower rates. But the standards they use to measure your health are shifting. For example, in 1994 a man who was 6 feet tall could have weighed up to 260 pounds and still qualified for relatively low rates, says Byron Udell, chief executive officer of AccuQuote, an insurance brokerage that deals with dozens of insurers. Now, a 6-foot-tall applicant must weigh no more than 200 to 205 pounds to be eligible for the best rates.
Other health criteria are not so uniform. Some insurers may require that you have a cholesterol level below 215 or even 200 in order to get the lowest premiums; others are satisfied with a level as high as 240, as long as you have a satisfactory level of HDLs (or good cholesterol).
