Life Insurance Rates
The internet is full of websites offering the best life insurance rates online or the lowest life insurance rates in the world…but how do you know if it’s true? How can you tell if the whole or term life insurance rates you’ve just been quoted really are the lowest available to you?
The simple answer is that you can’t be 100 percent sure without thoroughly researching the market. This is because when it comes to quoting insurance rates life insurance is one of the most difficult to calculate, especially when the insurance providers use different criteria to put your quote together.
Common criteria used to calculate your life insurance rate
If we take a term life insurance rate as an example, most insurance providers will want to know the following at the very least:
- Your age
- Your gender
- The US State you live in and your full address with zip code
- Whether you use tobacco products
- How much life coverage you want your insurance policy to be for
- The number of years you want the policy to run for
Some smaller insurance companies may ask for more in depth information before quoting you a life insurance rate simply because they are more at risk financially if your loved ones have to claim on the policy in the event of your death.
Calculating life insurance rates
The answers to the questions above are scored by each individual insurance provider using a life insurance rating scheme. Most companies have their own scoring criteria and schemes and so it is vital that you submit your details to various insurance providers to get a good range of quotes.
Each of your answers will receive a life insurance ratings score, so for example a non-smoker might get a score of ten whereas a light smoker might score five and a heavy smoker might score zero. When added together your total score is an indication of your mortality risk, the probability that you will die before the end of the policy, resulting in a death payout.
Your mortality risk score is then assessed before being used to calculate your individual life insurance rate, which is given to you as a premium quote. A similar process to this could also be used to provide a whole life insurance rate as well.
When it comes to life insurance rates term policies are often the cheapest and easiest to quote for. You can boost your life insurance rating score by living a healthy life and only insuring yourself for the minimum amount required. You should also try a good number of insurance providers as there is normally one who uses a scoring scheme that works in your favor.