If you have a spouse and/or children, life insurance can be a wise investment. It's a good way to protect your family in case the unexpected happens. Obtaining life insurance coverage will ensure that your family will have enough money to meet financial obligations such as mortgage and car payments, college tuition, and utility bills. However, the process of obtaining coverage can be confusing and stressful. You may be unsure of what your premium will be or how much you will have to pay. Life insurance companies generally use a number of factors, which are discussed in more detail below, to calculate a policy holder's premium. |
Some of the factors used to calculate the premium are fairly basic, such as the policy holder's age, height, and weight. An older person will generally have a higher premium, since his or her death is statistically more probable than a younger person's death. Coverage providers use the height and weight to calculate a person's body mass index, because obesity is generally a sign of serious health problems. Obese people also tend to have higher premiums.
In addition to age, height, and weight, some coverage providers also take a person's gender into account. On average, women tend to live longer than men, meaning that men will often have higher premiums. However, many states require unisex rates because they view gender-based discrepancies as a form of discrimination.
Personal and family health history is another factor. If you have a history of health problems, your premium will generally be higher than that of a person who has maintained good health throughout his or her life. Coverage providers consider a person's family history to figure out what diseases he or she is at risk of developing as he or she gets older. Many diseases, such as diabetes, high blood pressure, dementia, some mental disorders, and certain types of cancer, run in families.
Some life insurance companies will also take a person's occupation into account. People with dangerous jobs are more at risk of dying than those with more laid-back professions. This means that police officers, racecar drivers, firefighters, airplane pilots, and roofers will have high premiums. Based on the death rates, these jobs are considered among the most dangerous jobs in America, according to recent figures published by the Bureau of Labor Statistics.
In addition to a person's occupation, most coverage providers will also consider his or her hobbies when calculating his or her premium. Some people prefer hobbies that involve a certain amount of risk, such as hang-gliding, hunting, skydiving, or bungee jumping. Correspondingly, these people will have higher premiums than those who prefer scrapbooking, art collecting, or interior decorating. Other lifestyle considerations include excessive smoking or alcohol consumption, both of which can have disastrous effects on a person's health, putting them at risk for death.
Life insurance is an important step in protecting your family. Kansas City residents can find out more here: http://www.twinlakesins.com.
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