Time to Reprice Your Life Insurance

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.

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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).

Family-history requirements also vary. Some insurers will deny you their best rates if your parents or siblings were diagnosed with certain illnesses before age 60. Other companies are only concerned if parents or siblings actually died of a particular disease.

Because standards vary so much, it's best to have on hand as much information as possible about your medical and family history, cholesterol, blood pressure and weight, so you can get an accurate price quote on a policy. And if the quote is higher than you expected, don't settle for second-best. You may be able to do better. Go to Insure.com, which will show you each company's underwriting standards. Or contact AccuQuote (800-442-9899; www.accuquote.com), whose agents can steer you to companies that are in sync with your health conditions and family history.

Potential survivors. Thanks to medical advances, more accurate screening tests and closer analysis by insurance actuaries, even people with health problems can qualify for attractive rates on life insurance. "The key is the ability to pinpoint patients with the potential for long-term survival," says Michael Kalen, executive vice-president of The Hartford. "Doctors can do that much better today than they could in the past."

Two years ago, The Hartford became the first insurer to offer standard rates for women age 40 and older who have been treated for stage 1 breast cancer. To qualify, patients must have been treated for the first time for a small, localized cancer and been given a strong prognosis for survival. In the past, such applicants usually had to wait up to three years before qualifying for coverage. Now they can get a policy after completing treatment as long as they're disease-free at the first follow-up visit.

Last year, The Hartford began offering standard rates to some prostate-cancer survivors age 60 and older who have been surgically treated (a biopsy or radiation alone is not sufficient) and who have satisfactory Gleason and PSA scores (both are screening tools for prostate cancer). In addition, the cancer must have been confined to the prostate.

Other insurers have also lowered their rates for people with certain types of cancer and other medical conditions (including coronary-artery disease and well-controlled diabetes), and they've made it easier for older applicants to qualify for standard rates. "We loosened the height and weight requirements above age 70," says Kalen, "because if you have some heft, you're not as fragile. We'll also accept higher cholesterol and blood-pressure levels above age 70 as long as you have longevity in your family."

Make your case. Once again, however, not every insurer has made the same adjustments. It's not unusual to be rejected by one company, charged two to three times the standard rate by another and charged several hundred dollars per year less by a third.

John LaVigne, 53, had been paying more than $1,500 per year for a $150,000 term-insurance policy with a ten-year level-price guarantee. In search of a lower rate, he applied for a policy through Savings Bank Life Insurance. The company rejected him after his medical exam, primarily because of his asthma and his family medical history.

Then LaVigne, who lives in Medford, Mass., consulted an agent at AccuQuote, who thought he could get LaVigne a policy for about $1,000 per year. Both he and his agent were surprised when he ended up getting a preferred rate from Genworth, which offered him a $250,000 policy for less than $550 per year. "I nearly fell off my chair when they offered me lower premiums for a higher amount of coverage," says LaVigne.

If you have a medical condition, it's important to present a strong case to the insurer -- including letters from doctors and a cover letter explaining how you're managing your illness. "The more information you can provide to make the underwriter comfortable that everything is under control, the better it is for you," says Udell. Remember: The insurer will check your medical records and do its own examination before setting your final price.