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Most people generally understand that some people are higher risks than others in the minds of life insurance companies, and people who are higher risks will have to pay higher premiums for the same amount of coverage than other people who are about their same age and the same gender (and in extreme cases they may be denied coverage altogether). However, many people don't know just how easy it is to be classified as a higher risk.

Most people who have ever applied for life insurance policies know that the industry has three broad categories for assessing risk and setting premiums that figure automatically into someone's policy: Preferred Plus, Preferred, and Standard. Then, on top of that, there is another pair of risk ratings that everyone gets either one or the other of: Smoker and Non-Smoker. Just because you smoke doesn't mean you are fated to be a mere Standard risk. Many people are underwritten as Preferred Smoker.

People are well aware that smokers are higher risks than non-smokers and that people who are applying for more than a minimal amount of life insurance (usually above
$70,000 on average) have to take a physical in order to see what premiums they qualify for (except in cases where people apply for "guaranteed issue" life insurance, but the premiums on this type of policy are so high, and the upper limits on their face amounts so strict, that they aren't worth it unless you have no other life insurance option due to some kind of severe condition). But, most people don't realize that many life insurance companies consider any kind of tobacco use, and that includes "social smoking" or the use of chew for instance, the same as the use by a two-pack-a-day regular cigarette smoker. And here's another thing: some life insurance companies have actuaries and underwriters who are more worried about your lifestyle than they are about your health or your medical records.

For instance--are you fit as a fiddle, in the prime of youth or your middle years, never smoked a day in your life, always drink your daily V-8, and have an excellent family history from a medical standpoint...but, you love to kayak in whitewater rapids, climb mountains, and ski black diamond moguls? Guess what? You may very well be categorized as "High Risk" and be forced to pay very high premiums by many life insurance companies.

William Carroll, an actuary with the American Council of Life Insurers (ACLI), says, "The healthy bungee jumper scares me more than the well-medicated money manager in midtown Manhattan."

Here's another factor related to your medical condition: some life insurers care more about your mental health than your physical health. Let's say you're just like the person mentioned above physically, but instead of downhill skiing or the other activities you are on anti-depressants. Even if these medications are working fine, you will probably have to pay a higher premium than you otherwise would without the medications. Why? Well, actuaries know that people who are on anti-depressants are more likely to fall into depression than others, and people who get depressed are more likely to kill themselves and thus pose a greater risk to the finances of the insurance company. It sounds cold-hearted to think about this matter in such a calculated way, but that's the job of actuaries and underwriters--they have to accurately assess risk and price for it accordingly or else they put the company in danger of going bankrupt through too many high claims and then nobody is covered at all.

And even though it is a federal offense for life insurance companies to try to claim you are a higher risk based on where you live, they can and do make risk assessments based on where you like to travel to. Got relatives in the Sudan that you go to visit three times a year? You'll be paying a higher premium than your next door neighbor of the same age and gender who hardly ever leaves the state.

The good news is that you can use life insurance brokers and online rate comparison services to find life insurance companies that aren't as frightened of your daring personal life or your pharmaceutical use, and you can even through them find life insurance companies that specialize in underwriting people like you. If you think you're a higher risk, set up an appointment with your local broker and check out places online like Progressive Insurance and AccuQuote.

The author lives with her husband in Maryland, with their two dogs and cat. She put together the website http://www.affordable-life-insurance-guru.com in order to help the everyday person navigate the often confusing world of life insurance

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