How do insurance companies determine the amount you pay for life insurance?

Answer 1

There are many factors that come into play that insurance companies use to assess how much you need to pay. First of all it all depends on the kind of insurance policy you would like-term or whole life. Term life is usually the cheapest but it is a temporary insurance. Common factors that are taken into consideration are:

• Age

• Insurance coverage

• Health status (the company will conduct health examinations which may include a blood test, urine specimen, blood pressure reading, height and weight measurement, and other tests they may deem necessary for the evaluation).

• Whether you are a smoker

• Family health history

• Driving record

• Any history of drug or alcohol abuse

• Participation in life-threatening sports, occupation.

Depending on these factors, and other factors, you will fall under one of these three categories: Preferred Plus, Preferred or Standard. Most healthy people fall under the category of Preferred. You would have to be exceptionally healthy to fall under the Preferred Plus category, which entitles you for the cheapest rates. Rates can differ considerably from company to company, so you should do a comparative study of life insurance quotes from leading insurance companies to find good savings on your life insurance policy.