Most people applying for life insurance know that health issues can earn you higher premiums. But your driving record can also affect your life insurance rates. During the underwriting process, your insurer looks at your motor vehicle report (MVR).
You’ll pay more for life insurance if you have recent moving violations, license suspensions, a DUI, or reckless driving violations. You can be declined a policy if you have multiple DUIs or several moving violations in your driving history.
Life insurance terms you should know
Beneficiaries: The people you name on your life insurance policy to receive the lump sum of money — also known as the death benefit — when you die.
Cash value: The portion of a permanent life insurance policy’s monetary value that grows tax-deferred over the life of the policy.
Death benefit: The amount of money the life insurance company will pay your beneficiaries when you die.
Face amount: The dollar amount, or death benefit, your beneficiaries receive if you die while your life insurance policy is active.
Insured: The person who is covered by the insurance policy.
Policy: The legal document that includes the terms and conditions of your life insurance contract.
Policyholder: The person who owns an insurance policy. Usually, this is the same person as the insured.
Permanent life insurance: A type of life insurance that lasts for the rest of your life and usually includes a cash value account.
Premium: The amount you pay your insurance company to keep your coverage active. Premiums are typically paid monthly or annually.
Riders: Add-ons to a life insurance policy that provide more robust coverage, sometimes for an extra cost.
Term life insurance: A life insurance policy that lasts for a set number of years before it expires. If you die before the term is up, your beneficiaries receive a death benefit.
Underwriting: The process where an insurance company evaluates the risk of insuring you and determines your final rate.
What is a motor vehicle report (MVR)?
Your MVR is a record of your driving history. Your state’s DMV maintains your record, which includes:
Accident reports
DUI/DWI convictions
Traffic citations
Vehicular crimes
Violations don’t stay on your record forever, but how long they remain on your MVR varies by their severity — a DUI will stay longer than a speeding ticket, for example — and your state. You can order your MVR from your state’s licensing agency.
How does your MVR affect your life insurance rates?
Most life insurance companies consider the past five years of your driving history when setting your rates.
Every insurer has its own guidelines for evaluating applications, but generally the more violations on your record, the lower your risk classification and higher your rates will be.
To qualify for the lowest life insurance rates with most insurers, you need to have no:
Driver’s license suspensions or revocations in the last three to five years
DUIs or DWIs in the last five years (up to 10 for some insurers)
More than two to three moving violations (e.g., speeding) in the last three years
Reckless driving charges in the last five years
If you have any of the above on your MVR you won’t qualify for the most affordable premiums, but you’ll still be able to get life insurance in most cases.
Some insurance companies will give you a lower insurance classification or charge you a flat extra fee of $2 to $4 per $1,000 of coverage you buy.
For example, a 30-year-old with no violations could pay around $23 per month for a $500,000, 20-year term life insurance policy, according to Policygenius data.
With a few recent moving violations, someone might pay $38 to $47 per month at a lower insurance classification. And if charged a $3 flat extra due to more than three moving violations or a recent DUI, they could pay $150 to $155 per month.
However, if you have multiple DUIs or DWIs on your record, you’re more likely to have your application postponed or declined.
Learn more about getting life insurance
Can you get life insurance after a DUI or DWI?
One DUI or DWI won’t disqualify you from buying life insurance, but if it happened less than two years ago, it will be very difficult to find an affordable policy.
Once you reach two to three years after your DUI, you’ll qualify for a Standard Plus or Standard health classification — which come with average rates — with many insurance companies.
Only one of Policygenius’ partner insurers might offer coverage to people with DUIs or DWIs that occurred less than one year ago: Prudential. The insurer will take a holistic look at your profile and driving history even if you have had a DUI in the past year. You’re more likely to be approved if you've had no additional violation
You’ll be charged steep premiums if you qualify. After three to five years have passed you can shop for a new policy or apply for reconsideration to get lower rates.
Even if your application is declined, you may be able to get some coverage through your employer or with final expense insurance. This is a type of policy that offers a small coverage amount — up to $25,000 — to cover end-of-life expenses, like a funeral or medical bills. Anyone, regardless of insurance risk, can be approved.
Both options are likely to leave you with less coverage than you need, but they’ll provide some financial protection until you can qualify for a more comprehensive policy.
If you have any violations on your MVR, a Policygenius agent can work with you to compare different policy options. They’ll consider your entire application and recommend the best insurance provider for your circumstances.
