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What Affects Life Insurance Rates?

What Affects Life Insurance Rates?

Everyone knows that life insurance rates vary from person to person. However, what most people do not fully understand is the reason as to why these rates are different for each individual. Knowing exactly how rates are determined could help you to figure out what you should be paying and compare that with what you are currently paying to determine if you are truly getting a good deal or not.

What Affects Life Insurance Rates - You Should Read

What Affects Life Insurance Rates
What Affects Life Insurance Rates

The first way in which insurance rates are calculated is your current state of health. Which makes sense since you are applying for life insurance. No company wants to take on a client who is unhealthy because that means that they may have to pay out sooner than expected. For those that drink alcohol, the rate will be much higher because companies view the consumption of alcohol meaning that the person has a higher chance of getting into an accident and getting killed. For those that smoke, the same goes, you will also have a higher insurance rate because your chances of developing cancer more than double. However, other health factors also play in. For example, being overweight means a higher rate than someone who is average weight. If a person has had a past heart attack, then they too will be paying more for life insurance because the chances of the person having another heart attack are significantly higher.

Most people refer to the way in which life insurance rates are calculated as a system of debits and credits. The debits are those problems, such as the health problems listed above, and the credits would be things such as working out, staying at your recommended weight, not smoking or drinking, and overall maintaining a healthy lifestyle. So how do you make sure that your credit for life insurance is higher than your debits?

The only option you have is to avoid those problems that lead to debits when the life insurance company looks at your profile. However, if you are a person that has quite a bit of debits on your profile, many times if you can prove that you are working to erase these debits, then your rate will improve. For example, if your doctor says that you are on a weight loss plan to make your weight better or to lower your cholesterol, then the company could possibly look at this as a step in the right direction and reward you with a lower life insurance rate.

Your rates can also fluctuate during a specific period in your life when you may be sick. For example, your life insurance rate could increase for several months while you are recuperating from heart surgery. Though, this seems unfair to most consumers, the majority of companies do this.

If you are deciding that you should shop for a lower rate on your life insurance, then consider looking at Cheaper Life Insurance Quotes as they can provide you with a number of companies and the rates in which someone in your health status could have. Remember to shop around for the best coverage for your money in order to make the best decision for your family.

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