General Insurance Tips: When to Buy

Personal insurance (health, life, and disability) policy rates are based on a number of factors. Two of the primary ones are age and health of the insured at the time of policy purchase. Many health problems are difficult, if not impossible to predict, but there are some that insurance companies try to anticipate.

For example, because 6 to 13 percent of women experience some form of postpartum depression after having a child and may have an increased suicide risk, life insurance rates may be higher right after childbirth. A woman shopping for a policy during pregnancy may also find higher rates and might have difficulty finding any policy once she is in her third trimester. The best solution in this example is to purchase a life insurance policy before becoming pregnant.

When it comes to investing in most types of insurance policies, the general rule is the sooner the better. Through the non-profit trade association MIB, the medical information that you submit to one insurance company can be shared with other companies in an effort to prevent fraud. While the MIB is actually a good thing for consumers (less fraud means lower insurance rates), its existence means that you should not delay the purchase of your next insurance policy. Going back to the postpartum depression example, even a woman who has been successfully treated can still have higher insurance rates. Buying a policy now eliminates the chance of increased rates down the road due to unforeseeable diseases, disabilities, or accidents.

If life were predictable, you wouldn’t need any insurance. Since you can’t predict what’s coming, take advantage of what you can control. To obtain the lowest possible rates, keep your eyes open for the trends that insurance companies follow.