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remember to shop around for life insurance

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Did you know that if you’re a single man (as in unmarried / not in a civil partnership) you will typically be asked to take an HIV test if you wish to insure your own life for more than £300k?

For all women and married men, the relevant figure rises to £1m. As no data currently exists for men in civil partnerships (they haven’t been around long enough), some insurers will treat them as single men, and others as married - I’m not sure whether this does, or should contravene the anti-discrimination laws that exist in the UK.

Interesting, don’t you think?

As a relatively young, and healthy person, I sometimes forget that insurance is based on risk, and for life insurance, that risk increases if you are more likely to get sick. And if you are HIV positive, you are more likely to get sick (although the risk can normally be controlled by medication at the right stage). But similarly, if you’re older, you are more likely to get sick. Or if you have an *interesting* medical history.

Life insurance is a relatively straightforward product though. It’s pretty clear cut when someone is dead (as in, there’s a death certificate) and all that happens then is that the sum assured is paid out. This means that life insurance is a easy to shop around on. Now, this is important if, like me, there’s nothing particularly special about you but it’s even more so, if you have any (perceived) risk factors.

So, if you’re thinking about taking out life insurance, shop around. Don’t attempt to defraud insurers by neglecting to mention relevant information if asked, but also, if you think that a certain requirement is too onerous (like taking, and disclosing the results of, an HIV or Hepatitis test), it’s perfectly possible that another company won’t have it.

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8 comments for “remember to shop around for life insurance”

  1. This got me thinking about statistics. Perhaps….perhaps most young unattached (married, partnered) men don’t want to buy life insurance unless they think they’re going to die sometime. Because they don’t have anyone to take care of and because they don’t think they’re going to die soon.

    Therefore, insurance companies reason, one big motivator would be terminal illness.

    Just a guess.

    Posted by Mrs. Micah | May 1, 2008, 12:17 pm
  2. That might be the case. I’m not sure whether the data actuaries use is based on the outcomes of people with life insurance, or just people in general. Statistics are funny things anyway.

    Posted by plonkee | May 1, 2008, 12:29 pm
  3. I’m pretty sure the data we use is based on everyone. Personally, I don’t think that any young, unattached men or women should be wasting their money on life insurance… and most insurance companies *agree* in the respect that we’re suspicious if these people come to us asking for big policies.

    - an actuary!

    Posted by Julie | May 4, 2008, 11:40 pm
  4. Actuaries usually use statistics for mortality based on their own company’s experience, so long as their company has enough experience for the data to be credible. (Credibility is a mathematical term here.) The reason a company uses its own experience, rather than general insured populations or the general population is because each company has different methods of underwriting (i.e. deciding what risk class and premium a particular person is in).

    Julie is correct about the suspicion of young unmarried men coming in asking for big policies. Unmarried men are much more likely to be HIV risks than married people or unmarried women. (This is a statistical fact and likely to do with the high HIV incidence among homosexual men and IV drug users, both groups more likely to be single men.)

    I’m also a big proponent of shopping around based on price for term life insurance. If you’re in the market for other products (for estate planning reasons), companies typically compete in many other areas besides price so you want to be more thorough for those products and consider every policy in toto. But a term policy is pretty much a term policy and the insurance companies compete pretty much exclusively on price (thereby making it a low profit product for the company). By all means a consumer should take advantage of this.

    Posted by Andrew Stevens | May 5, 2008, 3:31 am
  5. While buying your insurance it is advisable to shop around for the best deal. Evaluating quotes is a great way to find the best price for your insurance. By doing this you are able to look at what different competitors offer and choose the price and the type of cover that is best for you.

    Posted by Florida Health Insurance | May 25, 2009, 10:31 am
  6. Thats a very useful article for your english readers, I thought I should make you aware of our site as it might be useful for your uk visitors, I know it can be hard to find a cmopany who really looks out for you best interest. We provide a very similar service but for health, life and income protection insurance, we are independent so our complete focus is on finding you the best policy, there is always someone here at the end of the phone is there are any things that need clarifying. All we want to do is try and make peoples lives easier by taking the stress our of finding and buying insurance. I hope you will find our resources useful.

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    Posted by Insurance Brokers | January 27, 2010, 6:18 pm
  7. Someone is going to pay the premiums to get you covered, either you or your spouse. You will be subjected to medical exam and be asked some health questions to find out what your rate is…

    Posted by Beaches Resorts | July 12, 2010, 10:11 am
  8. Base on my experience I totally agree that we must have life insurance. we doesn’t know what will happen tomorrow.

    Posted by Paulo Roxcy | November 4, 2010, 11:48 am

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