If you are still pondering what factors determine the price of an insurance policy, then you are at the right place. In this guide, we will inform you about those essential factors that influence the amount of premium you pay to insurance companies. Read on to learn more.
Your health status and medical history
Are you more than 50 years? Do you smoke, drink or have any terminal illness? If yes, your insurer will ask you to pay more premium if you want a life insurance policy. If your family has a medical history of diabetes, cancer, heart attack, or any debilitating diseases, rest assured that the insurance company will charge you higher premiums than those who do not have any of those ailments.
It is no news that women have a higher life expectancy than men. Insurance companies know this fact and they usually charge men more premium than women.
Your type of life insurance policy
There are different types of life insurance policies in the marketplace. This includes term life insurance policies and permanent life insurance plans like whole life insurance. In most cases, permanent life insurance is much more expensive than term life insurance. And if you want to add riders to your policy, your insurer may charge you more for that.
Your bargaining power
If you are a good negotiator, you have higher chances of getting a good deal and reducing the amount of premium you will pay monthly or yearly.
Your insurance agent
Most insurance agents charge commissions for helping you to manage your cash value and get the best insurance policy. Their charges vary depending on their skills, experience, and bargaining power. But if you don’t need a broker, the price of buying and managing your insurance policy will be reduced considerably.