Insurance Questions and Answers

Question: What are the implications of  smoking marijuana on premiums and insurability when applying for life insurance?
Answer: Insurance companies have softened their stand on this in the past few years.  For anyone who is a casual user of marijuana, no more than once or twice a month, they will get a rating the same as a smoker.  However, anyone who admits to more frequent use may face an additional drug rating of 25% or more. On the other hand anyone who admits to using marijuana but the last time it was used was more than 12 months earlier, there will be no rating of any kind as long as that person is not a smoker.
 
Question: How does family health affect insurance premiums?
Answer: Insurance companies are only interested in the health of your mom and dad and brothers and sisters. They are not interested in grandparents or aunts, uncles or cousins. Generally speaking for life insurance health concerns carry more signifigance if they occur before the age of 65.  For example, if you are 45 year old male and you have a brother who is 48 who has had experience with heart disease and your father had a heart attack at 60, the insurance company will be less flexible with you if your height to weight ratio is not inside or close to the norms.
 
Question: Should I buy life insurance on my children?
Answer: The answer to this is very personal. Generally speaking however, when a parent or grandparent for example purchases a life insurance contract on a child, they are buying that child a financial product that becomes more irreplaceable as each year goes by.  Remember, that fundamentally the cost of life insurance is a function of how long the insurance company thinks you are going to live. The younger you are when you buy it, the more years you have to pay premium, the less it will cost.  It is an extremely useful purchase for the child with their adult years in mind.
 
Question: I am young and healthy. What product should I buy?
Answer: Buy a little bit of level premium life insurance, maybe $50,000.00 with a rider of cheap term life insurance.  This way you lock in your lifetime cost for the $50,000.00 of life insurance and guarantee your insurability for future purchases with the term.
 
Question: I have a policy my Dad bought for me when I was a kid, should I cancel it?
Answer: Fast answer, probably not !  It may not be much, but it will be a lot more than what you can get today for the same premium. Always get informed advice before canceling any life insurance policy.