Insurance companies pay when insured people die, so they base premium costs upon the statistical probability of each person's death. Insurance companies consider specific factors that make a difference in calculating the life expectancy of those insured by them. For example, men statistically die earlier than women of the same age do, so men have to pay a higher premium rate than women. Insurance companies do not simply charge you higher premium rates randomly. You can use the following steps to calculate your insurance rate by considering the factors that increase the rate you have to pay for premiums.
Step 1
Figure out the amount of insurance you need. Keep in mind that smaller amounts of insurance usually cost more per thousand than do larger amounts (i.e., the premium may decrease once your amount of insurance reaches more than $100,000).
Step 2
Factor in your height-weight ratio. Be aware that you will pay more in insurance premiums if your weight is perfect for a person who is several inches taller or shorter than you (as too much or too little weight causes you to have a higher potential to experience life-threatening conditions). Keep in mind that the further you are from your ideal weight (based on your height), the more you will have to pay in premiums.
Step 3
Factor your bad habits into the price of your insurance premium (as smoking cigarettes and abusing drugs and alcohol will increase the amount of insurance premium you pay).
Step 4
Increase your insurance premium rate if you have recently experienced or still have an illness that could result in death (such as diabetes, cancer or heart disease). Keep in mind that even if you had a disease in the past but are now recovered, you might still have to pay higher insurance premium rates (but that they will eventually decrease the longer you stay symptom-free).
Step 5
Accept that you will pay higher premium rates if you have a dangerous occupation, such as race car driving, or if you have many speeding tickets.
Step 6
Increase your insurance premium rate if you have family coverage as insurance companies add a constant policy fee (regardless of the amount of insurance you buy) in addition to your total premium when you have family coverage.
Member Comments