What criteria should I meet to qualify for a company’s cheapest term life insurance price?

Although term life insurance is getting more and more affordable and widely accessible, the risk assessment criteria that insurance companies use are now stricter than ever.

To qualify for a company's cheapest term life insurance, you need to be in exceptional health, have a spotless driving record, and have no hazardous occupation, hobbies or travels. Factors such as age, sex, weight, use of alcohol and nicotine, medical condition and medical record, family medical history, driving record, determine premiums in the process of underwriting.

The more likely it is for the policy owner to die within the policy period, the more likely it is for the insurer to pay. Hence, the strict requirements.

Term Life Insurance Standards

The eligibility standards may vary slightly from company to company, but generally, insurers put applicants into five or six health classes, depending on their health conditions and lifestyle. To be eligible for a company's cheapest term life insurance prices, you need to satisfy the following requirements:

• No use of nicotine in the past five years;
• No history of drug or alcohol abuse;
• Blood pressure within the 140/85 limits;
• No history of terminal or life-threatening illnesses in any parent or sibling before age 60;
• Cholesterol levels must not exceed 210;
• Normal weight;
• No risky hobbies or activities in the past three years;
• No driving convictions and violations in the past 5 years;
• No travel in underdeveloped or politically unstable countries.

Smoking is a factor that can considerably affect one's premium rates. For instance, Jude, 30, from New Jersey wants to purchase a 20-year term life insurance with face value of $500,000, but he smokes five cigarettes a day. If he was a non-smoker, his annual premium rates would range between $250 and $350. If he hadn't smoked in the past five years, he would have qualified for the "Preferred Plus Non-tobacco" health class, and therefore, got the cheapest premium price. If he hadn't smoked in the past three years, he would have been eligible for the second best rates, offered to the "Preferred Non-tobacco" class.  Jude is at a huge disadvantage for being a smoker, and he automatically qualifies for the "Standard Tobacco User" class whose premiums rates vary between $800 and $1,255 a year.

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