How do life premiums work ?

Life Insurance Premiums

Life insurance premiums are the monthly payments you make to the insurance company that holds your life insurance policy.  The entire life insurance industry is an extremely competitive one and when you are shopping for a new policy, you care going to have to do your homework in order to find the lowest life insurance premiums that still offers you everything you need in the life insurance policies.  Life insurance premiums are on the rise, forcing life insurance companies to develop more sophisticated methods of finding suitable life insurance premiums for you.

Getting a life insurance policy is a very personal and lengthy road thanks to the underwriting policies that are place.  Underwriters look into all of your personal data to determine how much of a risk you health wise and whether or not your will die before their life insurance policy expires.  Your life insurance premiums are based on the decision they make after reviewing all of your information.  They use actuaries – things that could cause to you die – an apply it your life if they feel it is something that could cause you to die before the end of the policy.  They use statistics from car wrecks, diseases, geographical information and more to formulate risk tables that are also used in determining what the life insurance premiums on your personal life insurance policy will be.

When the underwriters are determining you life insurance premiums, the biggest thing they look at are the risk tables.  They use these risk tables and the actuaries to determine whether you are a good risk for the company and they base their acceptance or denial on this information.  They are the ones that determine your actual life insurance premiums and they are not the evil devil spawn that everyone makes them out to be.  They are charged with watching out for you as well as the company and they have to make sure that you are going to be able to pay off your policy.  If you die before you do, they lose money.  Underwriters are kind of in a Catch-22 that way. 
If you are accepted by the life insurance company, then your life insurance premiums are determined based on how likely it is that you are going to die.

To qualify for life insurance and to learn how much your life insurance premiums are going to cost you each month, you are going to have to go through a very long and thorough application process that includes over one hundred questions about your health, your lifestyle, and your medical history.  You are expected to answer the questions honestly and the insurance company is going to want to know everything about your health from the day to you born to present.  They will then ask about your family’s medical history, looking for diseases and conditions that may b prevalent in the family that you could possibly suffer from in the future.  Heart disease, cancer, and diabetes are the three leading reasons why your life insurance premiums will be high or why you may be denied life insurance coverage all together.

You are also going to have to submit to a physical in order to get the best possible life insurance premiums for the policy you are you looking at.  The insurance company is checking to see if you are in good health and they will ask that the doctors check to see if there any conditions that you may have that you may not even be aware of having.  You will need to sign a release to allow the doctors to forward your medical history to the insurance company and if there is even the slightest possibility that you are not as healthy as you thought, you may be subjected to more extensive testing.  If this happens, you are already looking at higher life insurance premiums.

The next thing that is investigated is your lifestyle and the insurance company wants to know if you smoke, drink or use drugs.  These are high risk behaviors that will cause high life insurance premiums.  Your driving record will also be scrutinized for accidents, another factor that is added to your life insurance premiums being so high.  Women are more likely to have lower life insurance premiums than men.