Life insurance and where you live

Of all the markets for goods and services, insurance is unusual because, by law, there's no national market. Policies of insurance can only be sold by companies licensed in the state where you're resident. This means every US state has appointed a local Insurance Commissioner. It's his or her job to regulate the sale of insurance and deal with any complaints about the quality of the service. If you want to find out how your state's market works, you should go to the website run by your local Commissioner. There you will find guides on the relevant regulations and how they are enforced. Almost all the websites have a "help" facility where you can ask questions not answered by FAQs.

When it comes to the use of your ZIP code for insurance purposes, a number of potential problems arise. All life insurance companies group ZIP codes by the average income of the people who live there, the racial mixture, and so on. You should understand there's a direct relationship between where you live and life expectancy. Using the US Census data, all births and deaths can be examined. This shows people in some ZIP code areas where the average income is low, tend to suffer more health problems than those who live in more affluent areas. Because these areas don't have access to healthcare of appropriate quality, life expectancy tends to be lower. Indeed, there's a real irony at work here. For all the life insurers interest in genetic testing as an indicator of future health, the ZIP code is a far more reliable indicator. People live longer when they have access to affordable healthy food, live in smoke-free areas with good safety in public places, including play areas for children, and work in office environments. Their schools are better so children get the education to access jobs with higher pay. When you add in the fact such people are more likely to have health insurance which features preventive care, the reason for longer lives is obvious.

More can and should be done to offer equal access to better quality living environments and effective medical care. America should be a land of social justice not active discrimination based on the accident of where you happen to be born and live your adult life. Yet for so long as America remains a land based on capitalism, those with the money buy access to the services most likely to keep them alive while the rest die younger.

So if you live in the wrong ZIP code, the life insurance quotes will be higher to reflect the lower life expectancy. There can also be problems of privacy infringement if an area is known to have a higher than average gay community. Life insurance companies are known to request HIV testing for all local residents. These are issues of public health being used by life insurance companies to set higher rates for those living in the poorer parts of our cities.