Insurance premiums can be affected by many factors including:
- type and amount of risk
- size of deductible
- amount of coverage
- age of the applicant
- applicant's medical history
- applicant's past and current lifestyle
Insurance policies can be issued at the group or individual level. When group insurance is issued, minimal underwriting is required and the group as a whole is afforded insurance coverage based on a relatively average premium rate determined by the class of people being covered. When individual policies are issued, the insurance company evaluates the individual to determine coverage risk. The process of evaluation, or underwriting, can include the evaluation of many of the factors mentioned above. Upon completion of the underwriting process, the insurer uses a rating table to match the amount of assumed risk with the premium required to implement coverage.
Automobile, homeowner and health insurance policies can be issued at higher deductible levels in order to keep premiums affordable for the insured. Lower deductibles have the reverse effect and cause premium amounts to run higher. Some factors that can affect the size of premium payments for life, health, disability or long-term care insurance include age, smoker or non-smoker status, gender and medical history. Obtaining insurance for these types of policies at a young age will generally lock in lower premiums. Waiting until later in life to take out such policies can almost guarantee higher premiums. Premiums can also be made more affordable by reducing the coverage amount.
This question was answered by Steven Merkel.
Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase ...
Get insight into the intriguing career of risk analysis and forecasting. How much do actuaries make, and how is this field ...
Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ...
Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ...
Liabilities that a hospital or medical facility faces for the ...
Liabilities from the provision of counseling services.
A type of insurance coverage that applies to communally used ...
The premium required to insure the contents of a property rather ...
An insurance policy applicant that an insurance company has not ...
A homeowners policy endorsement that prevents the insurer from ...