Does your location impact your life insurance policy?

Location, location, location: How does where you live affect how you live? When it comes to life insurance, whether you live in a region prone to natural disasters, like hurricanes along the coast, or in a big city with a higher-than-average crime rate, it won’t affect your life insurance premiums. But other factors like state rules and regulations and how often you travel or live abroad could have an impact.

Key factors influencing life insurance costs

Your location might not affect your life insurance premiums, but other factors like your family history, age, gender, and various state regulations can. They can help insurers predict what level of risk they’ll assume by insuring you. That risk level will help them determine the cost of your policy, or even whether you’ll be eligible for life insurance. Other factors insurers may consider include if you live abroad, how often you travel abroad, and your job history.

Insurers consider these factors during the underwriting process, which determines your life insurance rates. The process can be simple or require a more in-depth review, depending on type of life insurance you’re requesting.

There’s good news, though: While your location, health, occupation and other associated risks might change over time, once you’ve been approved for a policy and continue to pay your premiums, those changes won’t affect your premium. Age is the main factor that can result in changes to an existing policy.

Age and health

Your age and health are the most common factors that determine your ability to get life insurance and your life insurance rates. The younger and healthier you are when you buy life insurance, the lower your premium will be because of a lower mortality rate.

Life insurance companies may evaluate your risk by reviewing your health history and requiring a medical exam. That information will help them determine your premium. During the exam, a doctor will typically check your weight, collect a blood or urine sample, and measure your blood pressure.

Occupation and hobbies

Your job might also affect your life insurance premiums or eligibility for coverage. For example, pilots, firefighters, police officers, members of the military or other occupations may expose you to higher risks. But your activities in your off hours also can be a factor, especially if you enjoy high-risk hobbies.

Family medical history

In some cases, your family medical history may affect your life insurance rates. For example, if your parents have heart disease, cancer or other high-risk medical issues that could be genetic, you may pay a higher premium than someone your age who doesn’t have that family record.

The impact of state laws and regulations

Each state has its own set of rules when it comes to regulating life insurance, policyholders, and the claims process. This means rates can vary from state to state, even with the same insurer. States have departments of insurance that establish and enforce these rules and regulations. That can affect the application process or the availability of certain features and riders.

Community property states

In some places, like community property states, specific rules govern insurance payouts when a spouse dies. For example, if a married policyholder dies with an adult child as the primary beneficiary, the surviving spouse may have a right to up to 50% of the policy payout if they lived in a community property state. This is true even if the surviving spouse wasn’t named as a beneficiary on the policy.

Living and travelling abroad

If you live in another country or travel often, it might affect your insurance. Frequent international travel can expose you to higher risks, which could affect your lifespan and lead to an insurance payout. Some insurers consider persons who travel abroad for more than three months to be non-U.S. residents. That means different underwriting rules apply that could affect your rates or eligibility for coverage.

Deploying military service members should consider this: If you’re deploying, your location wouldn’t be a factor in qualifying for coverage with USAA. Just make sure to apply before you leave. While the premium may be higher during a deployment, you’re still covered during wartime or from acts of terrorism. When you return from deployment you may qualify for a lower premium.

Why it’s important to regularly review your policy

Change is inevitable, so it’s important to check your life insurance policy periodically to make sure it still offers the protection you need. A good rule of thumb is to review your policy at least once a year. If you’ve experienced a major life change, you should contact your insurance agent or company representative.

Typical life events that could require a review of your policy outside of a routine schedule include:

• Marriage or divorce.
• Deployment or PCS.
• Birth of a child or grandchild.
• Significant health changes.
• Caring for an aging parent.
• Purchasing or refinancing a home.

Take action

Purchasing life insurance isn’t a decision you should put off. But even if you have, it’s not too late. USAA has licensed agents that are here to help make the process easier. They specialize in helping you determine the right amount and type of coverage that fits within your budget.