Your credit score is a factor in your life insurance.
We hear so much these days about how credit, and credit scores in particular, can affect just about anything you want to do in life. This is also true when applying for life insurance. Generally, your credit score will be taken into account when insurers are determining your premium. Before you apply for a life insurance policy, it’s a good idea to take a look at how bad credit can influence the final cost of insurance.
Your credit history can give insurers a snapshot of how well you’ve managed your finances. Insurance companies tend to look out for red flags that might indicate that you’re too much of a risk to insure. Being deep in debt or missing several credit card payments will tell insurers that you’re not keeping a tight grip on your finances. Typically, having bad credit won’t hurt your chances of qualifying for life insurance – you may just end up paying more per premium.
Late payments can be detrimental to your score. However, instances such as charge-offs, accounts in collection status, bankruptcy, and foreclosure can do even more damage. If you have any of these delinquencies on your credit report, it can have a large impact on the rate class you fall into.
Exactly how bad credit will be handled will depend upon the life insurance company that you are applying to. The insurer will want to know what kind of work you do because certain occupations are considered to be more hazardous than others. If in the course of investigating your employment they find that you are unemployed or have a history of spotty employment, they may pull and review your credit report to get a clearer picture of your finances.
Before you apply for life insurance, be sure to review your credit report. You can work on improving your score by paying bills on time, lowering your debt-to-income ratio, and not taking on any more debt.
Find the right life insurance policy to suit your needs, budget, and family by contacting the team at All Nevada Insurance today!