Helpful Information About Auto Insurance
Life Insurance Rates
Life insurance is a policy that pays a death benefit to the beneficiary of the policy. When shopping for a life insurance policy you want to ensure that the cost is fair for the amount of coverage. You can do this by becoming familiar with the factors that are used to determine the final cost of a policy.
Rate Classes
One component that is used to determine the cost of a life insurance policy is called the Rate Class. The Rate Class for an applicant is set the by underwriting guidelines of each insurer. Insurers typically place an applicant into one of three rate classes. The names of rate classes can vary, but are generally referred to as Preferred Plus, Preferred and Standard. To be placed in a standard rate class an applicant will be a smoker, obese, suffers from hypertension, presents high cholesterol or has a family history of disease.
Credit Score
Another component that is used to determine the cost of a life insurance policy is the credit score of the applicant. Insurers consider individuals with a low credit score as a higher risk applicant. The reasoning for this is that an applicant that has a low credit score is irresponsible managing money and more likely to file a claim. Whether this is true for an applicant or not, a low credit score will result in a higher cost for life insurance.
Medical Exam
A type of policy that does not require a medical exam is known as a simplified issue policy. However, if an individual requires a whole-life or term-life policy a medical exam is required. When an exam for life insurance takes place your height and weight is recorded. Your blood pressure and pulse is checked and a finger prick to provide a blood sample. A urine sample may also need to be provided. The results are used to determine your life insurance rate.
Rate Example
A typical 40 year old non-smoker can obtain a 20-year term life policy might expect to pay about $375 A year for a $500,000 policy. However, If this individual is a smoker he can expect to pay about $1,425 a year for the same $500,000 policy. This is an over 3.5 times the cost if an individual is a smoker compared to a non-smoker.
Lower Insurance Rate
You can lower the rate that you pay for a life insurance policy by getting into a better rate class. This is done by making a change to your lifestyle such as losing weight and getting exercise. Stop the smoking habit and refrain from using tobacco products. Once a decision is made for this commitment you can eventually lower your costs for a life insurance policy.
Shop Around
Insurer's use different calculations for determining the rate for a policy. Many insurers have a online calculator available to obtain a rate quote. You can also check for information such as the financial status of a particular insurer by consulting with Standard & Poor's or A.M. Best.