People often overestimate the difficulty a life insurance company faces in gathering information about your daily activities. Why start with this statement? Because there’s a concerning number of people who believe that obtaining life insurance marks the end of their concerns about it. If you’ve already secured the premium for your life insurance, then surely you’re free to do as you please, right?
However, merely having your life insurance sorted out doesn’t absolve you from potential repercussions. If it comes to light that you’re engaging in risky behavior or breaking the law, it could impact your life insurance. If a tragic event occurs and it’s discovered that you put yourself in a potentially dangerous situation, this too can affect your coverage. At any juncture, the agreed-upon coverage amount with your insurance company can be reduced. Additionally, you might be required to start paying higher premiums. In the worst-case scenario, your life insurance could be completely invalidated.
So, what are the most common hazards individuals pose to their life insurance policies?
I’ll assume I don’t need to enumerate the perils of smoking for you. You’re likely aware that smoking adversely affects virtually every aspect of health: flexibility, breathing, and even cognitive function. However, let’s say you weren’t a smoker when you obtained the life insurance policy, but took up the habit afterward. In this instance, it can be rather challenging for your life insurance company to ascertain that you’re a smoker.
Nevertheless, if an incident occurs due to your smoking habit, your life insurance company will become aware of it. A medical professional can confirm that you were smoking and will be obligated to notify your insurance company. Consider the most apparent risk associated with smoking: cancer. If your cancer is linked to smoking, your coverage will be significantly impacted. Moreover, bear in mind the multitude of ailments directly connected to smoking that can lead to mortality—heart disease, respiratory failures, among others. If the insurance company can’t conclusively determine that you weren’t smoking when you enrolled in the policy, your coverage may be affected by suspicions of fraud.
Statistics leave little room for doubt. Motor vehicle accidents rank among the leading causes of death and injury in urban areas. Is it any surprise that your life insurance company will be keen to learn about your driving behavior for as long as you’re behind the wheel?
Here’s something many drivers overlook. When you violate traffic laws or sustain injuries while driving, the courts can inform your insurance company. This isn’t restricted to incidents resulting in death or near-death experiences. Accumulating points on your license implies that, in some capacity, you’re becoming a riskier driver. And when you’re considered a high-risk driver, it’s bound to affect your life insurance. Don’t underestimate the relationship between changes in your driving record and your life insurance.
Since the 1970s, obesity rates in America have more than doubled. Claims about obesity being the primary global cause of death are certainly overstated. Nevertheless, there’s no denying its significant role in avoidable fatalities.
If you begin to gain weight to an alarming degree, nearly every type of insurance you hold will likely be impacted. Whether it’s auto, home, or life insurance, obesity can exert considerable influence. Obesity is even more readily linked to common causes of death than smoking. This makes you a greater liability for insurance companies when it comes to payouts. Furthermore, it’s the most challenging issue to conceal on this list, so complications with your life insurance policy are almost inevitable.
Extreme hobbies or occupation
For the ultimate adrenaline rush, people are often willing to take considerable risks. However, engaging in a hobby that jeopardizes your life could have repercussions for your life insurance policy. The challenge for insurance companies lies in discovering that you enjoy hang gliding or off-road racing as pastimes—chances are they’d only learn if you were to suffer a severe injury while partaking in the activity.
Of course, if your day job involves inherent dangers, it will be more challenging to keep hidden. If you assume a role as, for instance, a construction worker or a police officer, your insurance company will eventually become aware of it.
It’s imperative to recognize that life insurance isn’t a one-time deal. Your actions and lifestyle choices continue to matter even after securing a policy. Whether it’s smoking, driving habits, weight management, or engaging in high-risk activities, these factors can significantly influence your coverage. Being mindful of how your decisions impact your life insurance is a crucial aspect of safeguarding your financial security and well-being in the long run.