Waiting to Get Life Insurance Until You are Healthier

by Kevin on February 27, 2014

Life insurance is a financial instrument we don’t like to think about. We know we need it, but invoking thoughts of our own death and what happens to our families afterwards is uncomfortable to say the least.

We put it off for months, years, and decades. Meanwhile our family’s financial risk is high and the cost of finally taking action rises as we get older.

Maybe you’ve decided its time to get life insurance. You see the value. You see the need.

But there’s always an excuse or two in our heads to hold us back from making this decision. A common excuse: we’re not healthy enough.

What Does Health Have to Do with Life Insurance?

If you’ve never applied for life insurance you might not understand why your health plays a huge part into life insurance.

When you apply for a life insurance quote online the insurer wants to know just about everything about you:

  • your height and weight
  • your family medical history
  • your vitals and blood work

They send a nurse out to your home to draw blood which is sent to a lab for testing. They want to know your good and bad cholesterol levels, your red and white blood cell count, and numerous other items.

Your health determines where in the life insurance rate spectrum you land. These are typically Preferred Plus, Preferred, Select, and Standard. (Your specific life insurer might call each category something slightly different. The front end of the list is the best health and lowest rate, and rates go up the further you go down the list.)

If there are red flags in your health screening you won’t get the least expensive life insurance rate.

This makes your health important not only for your longevity, but for your out-of-pocket life insurance cost.

Never Wait to Buy Life Insurance

Perhaps you just had your annual physical and they did a blood work on you. The results come back with mostly average results, but a few spots of concern.

Should you wait to apply for life insurance?

You might be able to improve those numbers in 6 or 12 months through diet and exercise. A healthier you would land a lower risk score and thus a lower term life insurance rate.

However, waiting to buy life insurance is a horrible decision on for several reasons:

  • You could die between now and when you decide you are healthy enough to get life insurance leaving your family in financial straits.
  • You could still qualify for the cheapest life insurance rate with your current health.

But there’s one basic reason waiting is a bad idea…

The Beauty of Term Life Insurance

Term life insurance is a form of insurance that insures your life for a specific term.

That might sound redundant, but when you compare it to the significantly more expensive whole life insurance full of investment options, the simplicity of term life becomes obvious.

Term life insurance is just like car insurance. You pay your premium on time and the insurer agrees to insure your life for the stated amount. And just like car insurance if you don’t pay your premium on time the insurer cancels your policy. Or you could cancel your policy and go with a competing firm.

Term life insurance works just like that. You can buy a policy today, get your health screening, and pay whatever premium. If you land in a risk bucket above where you want to be, you still buy the policy. Then you get to work on becoming the healthy you. One year later you buy a new life insurance policy, wait for your health screening to confirm your lower rate, complete the purchase of the insurance, and cancel your old policy.

This isn’t possible with whole, variable, or universal life insurance because there are surrender charges and all sorts of fine print. Term life insurance is pretty simple, so don’t delay in buying a policy today. You can always cancel it in the future when you get a less expensive rate.

{ 1 comment… read it below or add one }

Elissa @ 20s Finances February 28, 2014 at 2:57 pm

It’s too risky to wait! All good points.

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