What are Typical Life Insurance Premiums?

Life insurance is all about risk management. When setting the typical life insurance premiums, insurance companies take important precautions, to ensure that their policyholders do not die prematurely. Therefore, this is the reason why life insurance premiums cost as much as they do.

To account for health risks such as diabetes, blood pressure and other diseases, insurers allocate the status (using the title such as standard or preferred) depending on the health, gender and age of applicants. This determines the typical life insurance premiums that the policyholder has to pay for a particular form of life coverage.

Now, to determine the status and health and to decide the premium amount, the insurer will verify the medical history of the family, the lifestyle of individual and other such factors. Most likely, it will require the person to undergo a physical examination. Hence, it is important for the policyholders to remain truthful, while they fill their health questionnaire.

If a policyholder furnishes wrong information, an insurance company not only stops the payments of typical life insurance premiums, but also nullifies the entire policy. And you wouldn’t want that.

For instance, if the policyholder mentions, that he is a non-smoker, but ends up dying with lung cancer, there are high chances that the insurer may deny any health benefits to the beneficiaries of the policy.

However, certain risk factors are beyond the control of a person. This includes age or gender. Since women have a higher life expectancy as compared to men, they have to pay lower premiums on their insurance.

Conversely, since men have shorter life spans, they much higher premiums for their coverage. Even the age of a person, has its effect on the insurance premium. For instance, young people have to pay lower premiums for a longer period, as compared older people especially men.

More About Typical Life Insurance Premiums:

Each insurer has its own typical life premiums that it charges. In a case, where a person suffers from a risk factor, it is better, to alert the agent about the problem when it comes to buying the policy itself.

Risk factors are controllable and the policyholder can seek a doctor’s help for that purpose. Hence, it is important to eliminate the risk factors. For example, stop smoking, control alcohol intake, reducing body weight, and maintain healthy lifestyle, etc. are all good ideas.

Insurance agents know that insurance companies, charge higher premium amounts to those people, who suffer from such risk factors. Hence, such agents may suggest some other insurance companies to an individual, which grants low premium policies in spite of these risk factors. In that case, a person needs to verify the credibility of that company before making any decision.

Steps for Lower Life Insurance Premiums:

Now, after acquiring the life insurance policy, if people improve their health substantially, it is important to alert the insurance firms, to lower the premium amount. Insurance agencies then conduct another complete medical check up of the individual and lower the premium amount.

Thus, people need to consider all these factors, if they want to reduce the amount of typical life insurance premiums. You can see how much you might pay with a free life insurance quote which you can get by using the following resources.

Factors Effecting Car Insurance Premiums

The cost of car insurance premiums varies significantly from vehicle to vehicle and person to person. In fact, many factors affect the premium that you pay for your auto insurance.

As such, the risk associated with an accident affects the insurance premium largely. The higher the risk, the more you have to pay for the insurance coverage.

Factors:

1. Age: Statistics show that younger people are at a greater risk of confronting an accident as compared to older people. Generally, drivers between the age of 50 and 65 are considered as safe drivers.

2. Gender: Women are supposed to make fewer claims than men and considered to be safe drivers.

3. Driving History: Usually, people with a clean driving record attract lower car insurance premiums.

4. Driver Geography: Your residing address also makes a difference in car insurance premium. People residing in areas that have less traffic are expected to spend less on auto insurance as compared to people living in urban areas that have massive traffic. Car insurance premiums differ from zip code to zip code, depending on the rate of vehicle thefts in the local area. If you reside in a high-risk area, your insurance premiums are expected to be higher.

5. Car Type: Luxurious and powerful cars are usually expensive and are likely to be stolen. Hence, may cost more to insure. On the contrary, a cheap car will cost less to insure.

6. Driving Violations: If you have an accident record, then you are at a higher risk and thus, your car insurance premium will be comparatively higher. You may be penalized by the auto insurance company for as many as five years from the date of the accident. However, your premium will get lower with the improvement in your driving records.

7. Credit Rating: If you have a poor credit history, then the car insurance company will charge you a higher amount of premium. You can work on your credit rating to get a better score. This will help you to save on your premiums.

8. Car Parking: Your car insurance premium will be greatly affected by the place where you park your car. If your car is secured against theft and damage, the premium will be low. So, make sure to park the car in your garage and have a car alarm or a tracking device to pay less on premium.

9. Annual Mileage: The car insurance company will also estimate the annual mileage of your vehicle. This is because the annual mileage of the vehicle gives the insurer an idea of the level of risk associated with an accident. This can affect your auto premium to some extent.

To sum up, before finalizing auto insurance, make sure that you compare the rates offered by various local auto insurance providers to get the best deal in car insurance. You may take optimum advantage of these factors and work on to lower your auto insurance rates.

What Affects The Costs Of Health Insurance Premiums?

If you are in the market to purchase a health insurance policy, you may be baffled at the array of prices of similar policies. There are a number of factors that determine the premiums on your health insurance policy. Each health insurance company will have their own actuarial team that determines the prices and classes of risks for each applicant. The applicants risk is a large part in what determines their risk class, but there are other aspects which causes fluctuation in premium prices.

One of the major factors that can raise health insurance premiums is the use of tobacco. Tobacco has been known to cause a number of health ailments that includes cancer. This factor can significantly increase the cost of health insurance. Knowing that cancer and smoking will decrease the average lifespan of a person, insurance premiums will rise. In some cases, health insurers will provide an incentive to help the insured quit smoking and cover smoking cessation products including nicotine gum, the patch, etc.

To qualify for health insurance, the applicant must be in reasonable health as well. This includes a proper height, weight and body mass index. People seeking coverage with a high body mass index, will have elevated premiums compared to those with an average BMI. Some insurance companies will not insure an obese person as it is not considered an insurable risk. Applicants looking to have the lower end of the premiums should be in the best health possible prior to applying for coverage.

An applicants age can have an ample impact on the price of coverage. The majority of younger people have minor issues with health issues. These may include common colds, a flu, ear infections, small accidents, etc. As a person ages, the likelihood of that person going to the doctor, needing critical care or becoming diagnosed with a chronic disease increases. The cost of major health issues becomes riskier for the company to insure. This is a direct result of increasing premiums as the person ages.

Pre-existing conditions for applicants will also raise the premiums on health insurance costs. Pre-existing conditions require more visits to a practitioner and greater risks for the insurance company to cover related claims to the pre-existing condition. Some insurance companies will only cover certain aspects of the pre-existing condition or won’t cover anything at all.

Another factor that may increase an applicant for health insurance premiums would be their gender. Unlike life insurance, women usually pay higher premiums than men for coverage. The reasoning behind this is due to the fact that women go to the doctor more often, need an OB/GYN specialist, take more prescription drugs, have maternity costs and are subjected to certain chronic diseases. The average cost to deliver a baby range anywhere between $10k-$15K of which doesn’t include the prenatal and postnatal medical care.

Other risks that the insurance companies factor in when determining premiums for the applicant are their lifestyle choices. These can range from a number of different topics including their profession, marital status, where they live and more. Insurance companies will take in all factors when determining a reasonable cost for insurance. For obvious reasons, a race car driver will be a much higher risk than an accountant. Insurance companies also are aware that married couples will live longer than single people. Other factors including the area code in which the applicant lives will be represented in the premiums. People that live in the same areas, tend to have similar eating, exercise and living habits.

Insurance premiums can be expensive, but insurance companies must manage risk properly and set a proper premium on applicants. Higher risk applicants will have higher premiums. Some variable that an applicant can control is eliminate tobacco use, exercise regularly and eat right for a healthy body mass index and have a safe occupation. Other factors including pre-existing conditions, family health history, gender, etc. the proposed insured won’t have control over. If an applicant was to choose higher deductibles, then the premiums would decline. However health insurance can be costly, but if the right coverage isn’t in place, a person could be exposed to a substantial risk.