What to look for when choosing a life insurance provider in the Empire State.
New York has one of the largest life insurance industries in the country. It has a unique set of laws, and is the first state to experiment with using social media in underwriting policies — which may affect your rates. Here’s how to go about buying life insurance in New York.
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How much does life insurance cost in New York?
Life insurance rates are tailored to the individual. We couldn’t find any publicly available information that suggests life insurance rates are affected by the state you live in. But some experts say providers hike up the prices in regions that are prone to natural disasters, such as earthquakes, hurricanes and tornadoes. Typically, New York doesn’t experience extreme weather, so the environment shouldn’t impact your rates.
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What risk factors will life insurance providers consider if I live in New York?
Insurers weigh up risks differently. But you can bet that the rate you’re offered will reflect the following risk factors:
- Age. Young people are privy to cheaper premiums because there’s a better chance they’ll outlive their policy. The average life expectancy in New York is 78.1.
- Weight. Obese and overweight people are more likely to develop serious health conditions, such as diabetes and heart disease, which is why life insurers hike up the rates. New York has the seventh lowest adult obesity rate in the country, at 25.7%.
- Tobacco use. Tobacco use is linked to heart disease, stroke and COPD. To compensate for that risk, insurers charge higher rates. In New York, 14.2% of adults smoke. Nationally, the rate is 17.1%.
- Occupation. People with dangerous jobs almost always pay more for life insurance. For example, the construction industry has the highest number of workplace fatalities in New York, according to the Bureau of Labor Statistics. Workers face a hazardous environment every day, which is why life insurance companies raise the rates.
- Gender. Men typically pay more expensive premiums. It comes down to life expectancy: on average, women outlive men by five years in the US.
- Driving record. Insurers reserve the best rates for drivers that don’t have DUIs or major traffic violations on their record. Algorithms scan crash data, too. There were 999 crash-related deaths in New York in 2017, according to the National Highway Traffic Safety Administration (NHTSA). This is a lot less than some other states. For instance, Texas had the most with 3,722.
- Lifestyle and hobbies. If you count race car driving, skydiving, mountain climbing or bungee jumping among your hobbies, you can expect to pay more for life insurance. Some providers even classify hunting, fishing and motorcycle riding as dangerous hobbies, so read the fine print before taking out a policy.
Did you know insurers might collect data from your social media?
Recently, the Department of Financial Services in New York has allowed life insurance companies to comb through social media and other nontraditional data sources to set rates. Scans of this type aren’t new — algorithms already assess credit scores, medical records and homeownership records to determine an applicant’s risk. But the social media access is a new development.
There are a few stipulations, however. When using automated programs, insurers have to prove their algorithms don’t discriminate against certain customers and groups.
What are New York’s leading causes of death?
These are the leading causes of death in New York, according to Centers for Disease Prevention and Control (CDC):
- Heart disease — including coronary artery disease (CAD)
- Accidents — including unintentional falls, motor vehicle accidents, and accidental poisoning or exposure to fire and smoke
- Chronic lower respiratory diseases — including emphysema, asthma and chronic bronchitis
- Flu and pneumonia
- Alzheimer’s Disease
- Hypertension (high blood pressure)
- Septicemia (sepsis) — often associated with lung, urinary tract, skin, intestine and gut infections
Does New York have any life insurance laws I need to be aware of before applying?
Yes. The insurance industry is regulated by Article 32 of the New York Consolidated Law, with input from the New York State Department of Financial Services.
These laws look out for the interests of policyholders:
- The free look period. Residents are given 10 days to review and trial their life insurance policy. If they decide to back out of the policy, they receive a full refund of any premiums paid. The free look period is extended in some cases. Policies sold by mail order offer 30 days, and policies sold in replacement situations come with a 60-day free look period.
- Grace period on late payments. In the Empire State, the grace period is set at 31 days. This means that if you miss a premium payment, you’ll have 31 days to settle your debt before the insurer cancels your policy. Usually, the grace period is left up to the individual insurer, so New York is unique in this regard.
- Timely payment on claims. Insurers are required to pay out beneficiaries within 30 days. If the claim takes more than 30 days to settle, the provider has to pay accrued interest on the proceeds, and may face other fees and penalties. The clock starts ticking on the day they receive a certified copy of the death certificate, and the interest is compounded daily.
- Life insurance policies are guaranteed. In the event that your life insurance company goes out of business, the Life Insurance Company Guaranty Corporation of New York will step in. The corporation will cover your policy up to a maximum of $500,000 for any one life. This limit is quite high; in comparison, Florida guarantees policies up to $300,000.
New York’s life insurance sector is both large and diverse, which means you have plenty of providers to choose from. Like most states, the rates, riders and policy features can vary considerably between carriers. To score the best possible policy, compare life insurance companies.