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Driving up Life Insurance Rates
by Kimberly Lankford

I was just shopping for life insurance and the agent asked me about my driving record. Could this really affect my rate? It seems like it wouldn't have much to do with life insurance.

Many life insurance companies have been using driving records as one of their pricing criteria for a while, charging you more if you've had several moving violations in the past few years. When you think about it, there is a correlation -- people with bad driving records are more likely to get into accidents, which is one cause of early death.

But what is surprising is how strict the companies have become. You used to be able to get a company's lowest rate as long as you had no more than three moving violations in the past two years (if you also qualify healthwise). Now some companies knock you out of that preferred rate if you have two moving violations in three years, says Byron Udell, CEO of AccuQuote, an insurance-shopping Web site.

This is just part of a trend by insurers to make it tougher to qualify for their lowest rates. They're also looking more carefully at your cholesterol HDL level, your blood pressure, medications, your family medical history (now asking if any relative had certain diseases, not just whether they died from it), and your height and weight. Even though many term insurance companies have lowered their rates over the past few years, it's becoming much more difficult to get those rates.

But the good news is that each company has different pricing criteria -- so one that won't give you the lowest rate if your cholesterol is less than perfect may not penalize you if you have a few tickets. Another might focus more on your family's medical history, but allow you to weigh more for your height than other insurers.

Because each company has different standards, it's essential to shop around before buying term life insurance, especially at a Web site or through an agent who works with many companies and asks a lot of medical questions before quoting you a price. A few good sites are InsWeb, AccuQuote, Insure.com and TermOnly.com.