There are plenty of reasons why COVID-19 might have prompted many people to commit to a healthier lifestyle – for example, making yourself less vulnerable to illnesses, adding more years to your life to spend with your family, or simply having an extra hour or two in your day to exercise rather than commute.
But whatever the motivation, lifestyle changes could also save Federal employees a significant amount of money by lowering their life insurance premium – if, that is, they look beyond FEGLI.
This is the case because whereas FEGLI is a group plan that charges premiums that do not depend upon varying levels of health, many companies offer both individual that do. However, since not all life insurance companies define and prioritize health ratings the same way, it’s important to consider how changes both big and small could allow you to:
- Find the best non-FEGLI carrier for the first time;
- Move to a better rating class with your current non-FEGLI carrier;
- Move from your current carrier to a new one that will rate you more favorably.
With all this in mind, here are seven of the most common changes that equate to “lower-risk” in the eyes of underwriters:
- Losing weight and/or exercising – losing just 5-10 pounds could move you from “obese” to “overweight” or from “overweight” to “average,” and walking for an average of just 30-60 minutes/day might make you a “regular exerciser.”
- Quitting smoking or decreasing your drinking – the former will save you big bucks regardless of its impact on your rating, and just one less six-pack or bottle of wine each week could change your classification.
- Improving/controlling pre-existing medical conditions – these include things like high cholesterol, high Blood Pressure, or diabetes. In many cases this can be as simple as beginning a new prescription or cutting down on your salt intake.
- Experiencing the remission of a life-threatening disease – in addition to giving you a new lease on life, it can have major life insurance implications after an appropriate waiting period. A waiting period of 2-5 years is common.
- Changing from a high-risk job to a lower-risk job – for Feds, this could involve moving from on-the-ground construction, overseas military service, etc. to an office job.
- Quitting high-risk recreational activities – while hobbies such as car racing, flying in personal aircraft, or rock climbing probably come to mind first, what qualifies as “high-risk” might surprise you. For example, your location relative to global conflicts can have a substantial impact on being able to acquire insurance.
- Improving your driving record – keeping your record clean after a period of relatively consistent moving violations, DUIs, or accidents means you’ll not only be a lower risk to yourself and others, but also lower your implied risk to many insurers.
When you’ve made one or more of these changes, the next task is doing your research and “shopping around” for the right company, and policy, for you. To make this as simple and productive as possible, it’s almost always worth consulting an expert at this point because:
- Insurers consider many factors beyond those above (for example physical factors that you can’t change, such as your age and height and family history) when determining your rating and premium amount.
- If you’ve previously been deemed uninsurable or looked for a plan once and decided it was too expensive, even those who haven’t experienced big health changes may be able to find a more understanding carrier.
- As always, you need to consider your and your family’s specific needs in order to find a policy of the right type, size, and scope.
Once you’ve weighed your options and, hopefully, discovered that a new carrier and classification could drastically cut your premium (in my experience, members who receive more favorable health ratings often save as much as $50-250 per month).
To have your health re-evaluated, you will need to complete a medical questionnaire and take part in a medical exam to show that an improvement in health is real and sustained. After that, you will wait for a reclassification decision (usually completed in a period of 6-12 weeks with timing almost entirely determined by the responsiveness of your doctor’s office) and hopefully, soon enjoy paying a much lower premium for a policy that provides the right protection, and well-earned savings, for you.
Eric Edwards joined GEBA in 2020 and began his career in the financial services industry in 2005 after helping his parents with their finances and wanting to help others with financial planning decisions. Eric listens to his clients’ needs to develop the most comprehensive strategy for their circumstances.
