Just in case you thought that the state of your health is all that life insurance companies are concerned with, let’s spend some time talking about your driving record. They’re interested in that as well – in fact, they’re very interested in it.
Your driving record is up there with your occupation and your hobbies as non-medical considerations when you apply for life insurance. The company will consider risk factors connected with each of those areas of your life to determine how much risk they add to your profile.
The Insurance Company Will Check Your Driving Record with Your State DMV
There will be questions on a life insurance application in regard to your driving history. But since many people develop a temporary bout of amnesia when it comes to answering such questions, the company will check your driving record with your state Department of Motor Vehicles (DMV). They will have a record of any violations that have taken place in your state.
Knowing that the company will verify your driving history with the state, you should do your best to be completely honest in your application. Even if your driving record is questionable, your honesty could win you points in other areas. And at worst, it will provide your insurance broker an opportunity to accurately assess your application before the records from the DMV arrive.
DUI/DWI Can Be Deal Killers on a Life Insurance Application
There are a variety of violations that can appear on your driving record. How much effect any of those will have on your life insurance application will depend upon the number and severity of the violations.
But one thing is certain, a charge of driving under the influence (DUI) and driving while intoxicated (DWI) will have an effect. If it is just one episode, and it happened a couple of years ago, it’s likely that your application will be approved, however you will pay a higher premium as a result of the violation.
If you have more than one violation for that same offense, it’s a better than even chance that your application will be declined entirely. In general, the insurance industry views multiple episodes of DUI/DWI as super high risk activities, and typically consider them to be outside the realm of approval.
Other Violations That a Life Insurance Company May Have a Problem With
There are other driving violations that don’t rise to the level of DUI/DWI in severity, but they can also affect your life insurance application. On the low end, a traffic violation for say, speeding, two years ago, may have no effect of your application at all. But if you have two or more violations, it’s likely that your premium will be set at a higher rate, in order to price adjust your policy for the higher risk that your driving history presents.
Multiple driving violations however can be problematic. In general, if you have four or more moving violations within the past three years, your life insurance application is likely to be declined entirely. Even without the obvious higher risks presented by DUI/DWI, a history of multiple driving infractions can be an indication of reckless behavior.
Multiple violations can indicate a disregard for the law. In doing so, you could risk early death for routinely driving at high speeds. Life insurance companies will not ignore this behavior. It is also possible that a pattern of reckless driving is an indication of other problems in your life that are not so obvious.
The Impact of Your Driving History on Your Life Insurance Application
Just as is the case with health conditions, a history of driving violations is considered to be a significant risk factor. Insurance companies are not in the habit of offering policies with preferred rates to people who have a history of driving violations. It is an indication that you might see an early death, resulting in the early payout of the death benefit under the policy.
Life insurance companies dislike early payouts on policies, it means they don’t have enough time to collect sufficient premium revenue to cover the cost of paying the benefit. This is why they seek to provide policies for the largest number of people with the fewest risk factors.
At best, with two violations in the past three years, you’ll simply be charged a higher premium rate. With four or more violations, your policy is likely to be declined.
What To Do If Your Driving History is Less Than Perfect
If you have multiple violations on your driving record, single best strategy you can adopt in getting life insurance is to “get clean”. That means that you will have to begin driving lawfully from this point forward. Fortunately, where driving violations are concerned, time can be your best friend. Since your driving history is typically searched back only three years, your driving history will improve as time passes and each violation falls off of your record.
The difference between four violations within the past three years, and three violations within the past three years, could be the difference between getting a life insurance application approved or denied. While the difference between three violations in the past three years, versus two violations in the same time period, could mean a substantially lower premium.
If you have significant driving violations, it’s important that you work with a competent life insurance broker. This is because a good broker knows which companies are likely to take the most favorable view of your particular situation. Those are the companies that you need to apply to, but only a good insurance broker will know who they are.
We’re here to help. If you have multiple driving violations, or any violations at all, give us a call and we’ll help you get the best life insurance policy for the lowest premium.
