Factors That Influence the Calculation of The Life Insurance Premium
Life insurance is a contract between the insurance company and the policyholder. The agreement states that a person is required to pay a premium of particular agreed money on the agreement frequency of payment. In case the insured dies, his/her family is provided with financial support. Different factors determine the amount of premium that you will pay on the life insurance coverage.
Your age significantly determines the amount of premium. Typically, younger people will pay fewer premiums. If you do not have the life coverage, you should apply it now because the older you get, the more you will dig from your pocket. Most of the insurer charges the same amount throughout your life.
Insurance companies offer different coverages. Each of them will cost a different amount of money. The more comprehensive it is in terms of coverage, the more you are going to pay for the premium. The whole life insurance policy, for instance, has no expiry. You will, therefore, pay more for this type compared to the ones that only cover a limited time. Don't use plagiarised sources.Get your custom essay just from $11/page
Term policies are life insurance policies that will only cover you for a limited time. The longer the time of the coverage, the more that you are going to pay. Ensure that you choose a term that will meet your needs. The premium will also be determined by the amount that you want to be covered. Million-dollar life insurance tends to cost you more than the other types.
Your health is another significant factor. Before you enter into the contract, the insurer will first want to know about your medical history. They will want to know if you have any preexisting conditions and whether you are taking any prescription drugs.
The insurance company will also consider your lifestyle. People who smoke alcohol are likely to pay more. Other drugs like alcohol which impact your health will also affect your premium. Your occupation matters a lot when the insurance company is calculating the premium that you should pay. Some works are considered to be riskier, and you have a higher chance of dying; for instance, people who work in quarries, roofers, etc.
Many companies like advance insurance, Atlanta can provide you with the insurance service. It is vital first to make sure that you have investigated the insurer before you choose them. Choose a company that will not delay when paying your beneficiaries. It should have a solid reputation and many positive reviews on the web.