How does family history affect my life insurance rates?

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How does family history affect my life insurance rates?

When it comes to personal health, family history can have a huge impact. For most people, this isn’t a huge surprise. There are articles in the newspaper about how genes affect your health, plus your doctor probably mentions it every time you go in for a check-up. So when it comes to life insurance, most shoppers aren’t shocked to find out that family history of cancer, heart disease, and diabetes can have a negative effect on the cost of the policy.

But how, specifically, does family history affect your life insurance rates?

Typically, life insurance companies look at two things:

  1. Whether or not one of your parents or siblings died from a genetic disease.

  2. What age they died.

The second question is usually the shocker for life insurance applicants. Most people realize that if their dad died of a heart attack, that’s going to negatively affect their rates. But did you know that, depending on the insurance company, whether or not he died at age 59 or 61 can have a huge difference?

Each life insurance company has health classifications – you can read more of the super exciting insurance details here – which essentially break you into different pricing tiers based on your health history. Except, in this case, it’s your family’s health history.

Not all life insurance companies track every disease, but here are the main four:

  • cancer (all types)

  • coronary artery disease

  • cardiovascular attack

  • Type 2 diabetes

If one of your immediate family members (parents or siblings) dies from one of these diseases, your rates might be affected. You will be placed into a category based on the age that your family member died of one of the above diseases. Typically, the cutoff age is either 60 or 65 – i.e., if a family member dies of one of these diseases before this age, it negatively affects which classification you’ll receive.

Sometimes, this can seem absurd – what’s really the difference between age 64 and age 65? However, once you and your agent know that this is what’s affecting your life insurance rate, your agent can help you choose another life insurance company that has a different cutoff age.

Let’s look at an example. Nick’s father died of testicular cancer at age 64. Nick applied for a life insurance policy, but received a higher rate than he would’ve liked. Turns out, the insurer he applied to had a cutoff age of 65 – as in, any cancer deaths in your immediate family prior to age 65 affected your health classification. Nick worked with his agent to find an insurer with a cutoff age of 60 and saved a ton of cash.

Speaking of gender-specific diseases like testicular cancer or breast cancer, some insurers won’t count that against you if you’re not that gender. This just makes sense – if you’re a woman, and your dad died of testicular cancer, it probably won’t affect your health.

Another sidenote: while most insurance companies are all or nothing when it comes to family history (i.e., if one of your parents or siblings died from a disease, that negatively affects your rating across the board), some insurance companies have wiggle room if only one of your immediate family members dies from that disease. Talk to your agent if multiple family members have died from the same genetic disease.

You also might be wondering – Hey, what if my parents lived to be 100 years old! Does that count positively towards my classification, or even erase some of my bad habits? Nope. Nice try, though.

Image: Jeremy Piehler