Is your Life Insurance Rated due to Travel?

Category: Financial Planning

Life insurance companies are allowed to "rate" policies, i.e.: charge higher premiums, based on factors such as health or lifestyle. Up until yesterday, in New Jersey, one of those lifestyle factors was travel. However, Governor Corzine just signed legislation prohibited insures to rate policies based on travel.

From Scott Goldstein at NJBiz - Corzine Signs Bill Ending Life Insurance Denial Based on Travel

Life insurance companies can no longer charge higher premiums to people based on past and future travel plans to places like Israel and Indonesia, according to a bill (A-1586) signed into law yesterday by Gov. Jon Corzine.

The new law, which takes effect immediately, prohibits companies from determining premiums or denying insurance "based on an individual's intent to travel abroad, unless the decision is based on sound actuarial principles."

What does this mean to you? If your present policy was rated for travel (which applies to many New Jersey executives of global companies) you may want to look at replacing the policy as you may get a lower premium.