How Can Your Driving Record Affect Your Life Insurance Premium?

The amount of money you spend on your life insurance policy per month is dependent on different factors. Your driving record determines your premiums for life insurance. The risks involved in taking on a new policyholder are assessed by insurance firms. They need to ensure that their investment earns a good return on it. This involves combining the medical records, lifestyle, and driving record of a policyholder to determine the risk.

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Driving Record Can Affect Your Life Insurance premium

Insurance companies are accustomed to researching their customers before issuing a policy. When assessing the risk factors, most life insurance providers will look at the last few years of your driving records.

Here are ways your driving record can exert its influence on your life insurance premium.

1. Affects Premium

Things you need to remember are your life insurance premiums and your driving record. The life insurance premium, as well as the acceptability, are adversely impacted by a poor driving record. Bad driving does increase your chance of death, and life insurance companies know that. As such, your insurance premium rates will also increase.

2. Denial of Policy

Life insurance companies are very strict about driving history. Not only can you not get the best coverage and premiums, if you have DUIs (driving under the influence) or DWIs (driving while intoxicated) on your record over the last few years, certain life insurance providers can defer coverage. And some companies would drop coverage.

3. Death Payout

If you were to be responsible for an accident, the insurance company may not provide coverage. If you have been truthful about your life insurance claim, have not covered an existing drinking problem or traffic violations, most providers will pay the benefits a death payout regardless of the cause of death. However, there have been several cases where insurance firms have fought lawsuits in court based on the belief that the death of the insured person was caused by his voluntary consumption of a substance, it is an inevitable consequence rather than an accident of driving under the influence.

4. Motor Vehicle Report (MVR)

Your Motor Vehicle Report (MVR) is a report card for your driving, also known as your driving record. During the underwriting process, this is what the life insurance company would look for.  Your state maintains your MVR, which includes your accidents and violations.  The life insurance premium, as well as the acceptability, is adversely impacted by a poor driving record (MVR).

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Conclusion

If you are considering buying life insurance, by living a healthier lifestyle and staying safe on the road, you can lower your premiums. Being a conscientious driver can also help you save on your insurance costs, in addition to reducing your life insurance premiums. A minor traffic violation or a reckless or high-speed driving can lead to some unnecessary costs down the road.