If Your Health Improves, so Might Your Life Insurance Bills

Your health plays a major factor in your ability to get life insurance, as well as how much you pay for it.

If medical exam results show you have high cholesterol, high blood pressure, or some other ailment that makes you a "higher risk" and boosts your premium payments, an insurer might consider lowering your rates in the future if you take effective steps to ease or eliminate those conditions.

Many factors, including the possibility of other health problems down the road and the freedom a company has to change guidelines, prevent lower premiums from being guaranteed to you.

"General practice" but no guarantee

In an insurance company's eyes, the healthier you are, the less risk you represent. When you buy your life insurance policy, many companies can even give you specific requirements for a premium reduction (suitable cholesterol and blood pressure levels, for example).

Christopher Graham, underwriting director for Hartford Life, says companies also reward good health in order to keep customers from shopping around for another policy. "It makes good business sense," he says.

Insurance companies stop short of putting a provision in your contract that promises your premium will go down if your health improves. Michael Snowdon, a faculty member at the College for Financial Planning in suburban Denver, says insurance companies prefer not to put such promises in writing because it could lead to lawsuits. "It comes down to a little skittishness on their part for anything that is going to force their hand," says Snowdon. "If you re-qualify on a medical basis for a lower rate, they're happy to give it you. But it's easy to function that way without all of the language in a contract."

Your improved health can't be a "flash in the pan"

To qualify for lower premiums due to health improvements, many insurance companies require you to show medical proof from your doctor that you've maintained those improvements for a specific period of time. For example, if you had high blood pressure that later went down, an insurance company might look at all of your blood pressure readings for the past year to determine whether you warrant a premium reduction.

For more severe health problems, such as cancer and heart disease, the time period for showing improved health can be longer. Getting a premium reduction after suffering a serious condition such as cancer is possible, but a company may require that the cancer be in remission for a long time - such as five to 10 years - before reducing your insurance bill.

There are some ailments for which it's unlikely you will ever get a reduction. Graham, of Hartford Life, cites heart-wall damage as a condition that will not improve, thus making it nearly impossible to get a reduction.

In some cases, the company will require you to undergo its own medical tests (collecting blood and urine samples, for example) to verify the information from your doctor. What happens if while checking for improvement for one medical condition, another serious problem is detected? Under most insurance policies, your rate would not increase. For example, if you lowered your cholesterol but the blood test showed you had developed diabetes, your premium would not increase.

Also, there is generally no limit as to how many times you can ask the company to revisit your health and lower premiums accordingly. "It's pretty much a no-lose situation for someone to reapply," says Snowdon of the College of Financial Planning. "As long as the premiums are paid, the life insurance is yours. They can't go back and reunderwrite to charge you a higher rate."

Improved health could result in big life insurance savings

Improving your health can save you money on your life insurance policy. Take a look at these examples.

• One insurance company says a 35-year-old male who smokes and has a $200,000 permanent life insurance policy could save 24 percent on his annual premium if he quits smoking by age 37. His annual premium would drop from $1,243 to $942.
• Another insurance company says a 35-year-old, nonsmoking male with a $100,000 term life insurance policy, who lowers his cholesterol from 300 to 180, would save about 13 percent on his annual premium payments.