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In 1978, Vermonters Ben Cohen and Jerry Greenfield started the famously unique and delicious ice cream company, Ben & Jerry’s. Despite its small size, Vermont is home to over 500 organic farms, and the state produces over 500,000 gallons of maple syrup a year. For these reasons, and many more, Vermont consistently ranks at the top of all states for health and happiness. So, it’s no surprise that they have a high life expectancy, low rates of obesity and death from diabetes, and kidney disease. But this is partly offset by a high rate of Alzheimer’s Disease which affects Vermont life insurance rates.
With an equal amount of Vermont residents reporting they are healthy and have major health issues, getting life insurance isn’t always easy—or inexpensive—in the Green Mountain State.
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Below are the major factors that affect life insurance rates.
Age - Age is one of the largest factors affecting life insurance rates. The younger you are when you purchase a policy, the less likely it is that it will pay out. So the lower your rates.
Life expectancy at birth in Vermont is 80.5 years, one of the highest in the nation. The life expectancy at birth for the US overall is 78.9 years. What if you purchased a 30-year term life policy in Vermont at age 54? You'd be more likely than not to pass away before 84 years of age, the end of the term.
On the other hand, what if you were 34 years old and purchased a 30-year term life policy? You'd be well under Vermont’s life expectancy of 80.5 years old when the policy term ended. And you’d be a much lower risk to insure and would therefore pay much lower rates than the person in the former example.
Driving Record - Car accidents are incredibly common. They kill more than 30,000 people per year. If someone has a driving record littered with moving violations, they are at an increased risk of a premature demise. The result is higher rates.
Firearm Deaths - Places that have higher rates of accidental or premature death generally have higher rates. A significant part of these untimely deaths comes from firearm injuries, which account for about 33,000 deaths in the US every year. In Vermont, the death rate from injury due to firearms is 9.2 per 100,000 deaths, the #15 lowest rate in the country. Nationwide, the average firearm death rate is 10.4 per 100,000.
Gender - Women live longer than men on average. So they pay less for insurance than a similar man would. In Vermont, the percentage of the population that’s female is 50.7%. The percentage that’s male is 49.3%. In the US as a whole, women are 50.8% of the population, and men are 49.2% of the population.
Health History - Most of us have one or two minor health issues. But if you have a serious illness or a family history of such illnesses it can impact your rates.
There are conditions like heart disease or cancer which can make your premiums much higher. In some cases, a pre-existing condition can make you ineligible. That's why it’s important to get life insurance before something serious happens.
Lifestyle & Hobbies - People who engage in adventure sports or who have potentially dangerous hobbies will pay more for insurance. This is especially relevant in Vermont, where skiing and hunting are common recreational activities.
Marital Status - Married people live longer and are healthier than similar single people. So, if you’re married, you can get a modest discount on life insurance. In Vermont in 2009, the rate of marriage for people over 15 was 31.8 per 1,000 people. The rate of divorce was 21.1 per 1,000 people. And the rate of widowhood was 9.2 per 1,000 people.
Occupation - People with hazardous jobs like logging and fishing will pay more for insurance than someone with a less dangerous, mundane office job. The most common job in Vermont, proportionally, is a subway operator.
Tobacco Use - Tobacco users don’t live as long as non-tobacco users. So smokers pay much more for life insurance than an identical non-tobacco user. Tobacco use is associated with a number of health complications, such as heart disease, stroke, and COPD. Any of which may cause higher rates and an earlier death.
As of 2013, the national average rate of smoking was 19%. To compare to the most recent data available, in 2014, approximately 16.6% of Vermont adults smoked cigarettes – about 84,000 adults.
Travel - If you regularly travel to developing countries, particularly countries on the US State Department’s Warning List, you will pay more for insurance than a traveler who sticks to developed countries.
Value of Policy - One of the largest contributing factors to a policy’s premiums is the value of the policy. As with anything, you get what you pay for. The more protection that you purchase, the more you pay.
Weight - Obesity has surpassed smoking to become America’s largest public health cost and problem. Obese or seriously overweight people have a lower life expectancy. This means an increased probability of their policy being paid out. Obesity increases the likelihood of health problems such as heart disease, stroke, diabetes, and some cancers. So overweight and obese individuals can expect to pay higher rates.
As of 2013, the adult obesity rate in Vermont was 24.7%. This makes Vermont the sixth-least obese state. Overall, the average obesity rate in the US is 34.9%.
While each of these factors plays a big role in the cost of your policy, some aspects of life insurance are entirely individual. Insurance companies calculate your rates based on your own health, habits, and lifestyle. That’s why shopping around and comparing quotes is so important–to make sure you’re getting the best rate possible.
|Rank||Cause of Death||Total Deaths||Death Rate||State Rank||US Death Rate*|
|3||Lower Respiratory Disease||353||44.1||26th||42.1|
|6||Alzheimer's Disease||269||32.9||5th (tie)||23.5|
|*Death Rate calculated as: (deaths from that cause / total population) / 100,000|
|Rank||Company||Direct Premiums Written (in thousands)||Market Share|
|1||TIAA - CREF||$82,381||8.9%|
|2||Prudential Financial Inc.||$64,995||7.0%|
|3||Manulife Financial Corp.||$64,800||7.0%|
|5||Jackson National Life Group||$53,434||5.7%|
|6||New York Life Insurance Group||$51,213||5.5%|
|7||Massachusetts Mutual Life Insurance Co.||$36,709||3.9%|
|9||Lincoln National Corp.||$34,120||3.7%|
|10||National Life Group||$29,827||3.2%|
Source: A.M. Best (Ratings as of 9/4/2015)
This legislation is used to regulate claims and provide certain protections to Vermont consumers, for example:
Grace Period: Any life insurance policyholder in Vermont is entitled to a 30-day “grace period” to make up a missed payment without punishment or file a death claim after the missed payment. This is to prohibit the insurance company from withholding a claim or cancelling a policy because of a slightly late payment
Timely Payment of Claims: In Vermont, it is required that insurance companies pay out claims in a timely manner, meaning within 45 days of receiving it. If unreasonable delay occurs, the state will fine, penalize, and/or sanction the insurance company and interest will accrue based on the length of the delay. The interest is later paid to the beneficiary as well.
These regulations don’t just protect consumers; they also protect insurance companies from fraud. For example, Vermont insurers may challenge any information in your insurance application for up to two years from the policy’s effective date. If they find any evidence of fraud, they can terminate your policy immediately.
This organization assists the customers of any insurance company that is found to be insolvent. If you have concerns about the financial well-being of your carrier, you should contact the VLHIGA. Their contact info is below:
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