There are many factors that insurance companies use to calculate the cost of life insurance. These can include a person’s smoking status, their age and other factors such as various benefits that are included on the policy. The cost of life insurance can be a little or a lot depending on the amount of coverage that was selected.
One factor that insurers use to calculate the cost of life insurance is a person’s smoking status. The smoking status can vary from insurer to insurer but it consists of a standard smoker, abstaining from using cigarettes and abstaining from using tobacco products. The best rate of course will always go to the non-smoker. However, those that have quit can benefit is they have stopped smoking for one two two years or more. The smoking status is used to determine how long and if a person has abstained from smoking or using tobacco products. Whether a smoker or non-smoker usually an insured can get better rates if they do not smoke or have stopped smoking cigarettes.
Another factor that insurance companies use to calculate the cost of life insurance is the age of the insured. Usually, the older a person gets the more a life insurance policy is going to cost. It is best to always get a life insurance policy when individuals are young because they are generally in better health and will get better rates for a policy. Insurance costs more for older people because of the way the mortality rates are determined. Insurers have calculations and charts that show general life expectancy based on a person’s current age. This is why it is more expensive for an older person to buy a new life insurance policy.
A life insurance policy can come with benefits that can make the cost of the premium decrease or stay the same for the length of the policy. One such benefit is called a guaranteed renewable premium. This is a benefit when selected will initially add a few more dollars to the cost of the policy. However, the benefit is designed to keep the premium amount the same when purchasing additional insurance especially with term policies. A guaranteed renewable premium also means that an insured does not need to take another health exam or proving insurability. This type of benefit is a great option because a person’s health can change at any time.
The cost of life insurance can cost a little or a lot depending on the amount of coverage that was selected and any benefits that are included. Coverages on an insurance policy can vary depending on the type of policy. There are whole life, term as well as simplified issue policies that are available depending on an insureds needs.