Cost of Life Insurance
When it comes to getting a great deal on your life insurance policy, it is important to understand what goes into the cost of your monthly premium. Several things figure into the total cost of your life insurance policy including: your health, your age, your credit score, and what type of policy you choose.
What does your health have to do with your life insurance cost?
First of all, it is important to understand what your life insurance policy is designed to do. Life insurance is designed to help your loved ones pay for your final expenses, pay off any outstanding obligations as well as replace your income to help protect your family from financial hardship.
When it comes to your health, insurers offer lower premiums to insured individuals that are in good health. The main reason behind this is that if you are healthy, you are less likely to die, and the insurance provider will cover you at more affordable rates. Therefore the insurer can collect monthly premiums from you much longer before it has to pay out your death benefit. Ultimately, this translates into a lower monthly payment for you.
Many individuals do have medical conditions and are on some sort of medication or treatment plan. Therefore, it is important to research how your particular condition can affect your life insurance. For instance, people with diabetes will pay different rates than a person who is overweight or being treated for a heart condition. Before comparing rates it is good to know your health class rating. This is helpful to know so when you are receiving rates from varios agents you can see if the rates you receive are realistic. Beware some companies tend to quote you at a higer health class for cheaper rates even though you do not qualify for these prices. This is so they get you out of the market and stick you with a big bill once the policy gets issues. To learn how to avoid this tactic visit our review on selectquote. Shopping smart can save you a lot of time and money in the end.
When reviewing a life insurance policy, make sure that you read the exclusions portion of the policy to make sure that any health conditions that you do have will be covered in the event you die. For instance, many life insurance policies exclude certain conditions such as cancer. This means that if you take out this policy and then end up dying of cancer, no death benefits will be paid to your family.
How much does life insurance cost:
What does your age have to do with your life insurance cost?
As with your health, your age factors into the total monthly cost
of your insurance premium. The main reason for this is closely tied
to your health status. The younger you are, the more likely you are
to be in good health and the less likely you are to die. This means
that the insurance company has more time to collect payments from
you, which translates into a lower monthly cost.
There are two main types of life insurance policies:
o Whole Life - permanent policy
o Term Life - 10, 20 year, or 30 year policy that will expire.
Whole life policies will cover you for the entire duration of your life while term life policies are designed to cover you for a specific period of time. Term life policies are designed to expire before you reach a certain age in order to control costs.
What does your credit score have to do with your life insurance cost?
Your credit score is a reflection of how reliable you are when it comes to paying your bills. Having a good credit score means that you will most likely pay your monthly premium on time each and every month. These are the types of customers that insurance companies are hoping to attract and therefore offer the lowest rates to.
But your credit score will also tell the insurer other things about you. For instance, people with good credit scores are often in better paying positions and health insurance which allows them greater access to routine or preventive health care. This access to care means that there is a higher likelihood that these individuals will live longer, healthier lives, which translates into lower monthly premium costs.
What does your policy choice have to do with your life insurance cost?
As mentioned above, life insurance policies come in two main types of policies: term life and whole life.
Term life policies are designed to cover individuals for a specified period of time and generally exclude higher risk age categories. Because these policies are designed to eliminate higher risk categories, they are priced lower than whole life policies. There are many different kinds of term life insurance policies, such as return of premium, guaranteed level, and decreasing term life insurance, available on the market.
Whole life policies are designed to cover you throughout your life and because they can't be cancelled for health issues or age considerations are often priced higher than term life policies.
These are just a few of the criteria that factor into the cost of your life insurance policy, though they are the major ones. For more information regarding how your life insurance policy is priced, talk to your local insurance agent or insurance company.