When it comes to life insurance, The Cheapest Life Insurance is quite used to people asking how exactly underwriters work out what premiums people will pay. Therefore in today’s blog, we thought we would run through some of the basics of underwriting, so that you can better understand how it works and how the premium total is determined.
This should help you work out whether you can cut costs should you want to get your life insurance as cheaply as possible or indeed whether you may want to even make some lifestyle choices in order to lower premiums. Whatever the reason, we aim to help!
So let’s start with the basics…
An insurance provider works out the policy rate based on age, gender and whether you smoke but may also look at previous health issues and if you are prone to doing things like extreme sports or even traveling to very high risk countries on holiday, this will affect the price that you pay.
As well as this, family history will also be relevant to anyone applying for life insurance as this helps determine what premium you pay and how insurable you actually are. You may have a history of early on-set diabetes for example or specific cancers that are deemed as high risk due to their hereditary nature.
An insurer will also work out the purpose of your life insurance – usually of which things like protection of family, mortgage protection or funeral cover are very common. Some people also utilise life insurance for the planning of any estates to help reduce things like inheritance taxes and perhaps even to add some kind of cash value to a policy to be left as a financial legacy.
So based on the ways that life insurance companies determine policy rates, you can actually assist yourself in lowering any premium by living healthily, giving up smoking and of course looking after your health as well as you can.
Another factor to consider is how competitive the market is though. As there are insurers who would like to insure you, this can often mean you can get better deals by shopping around for your life insurance. Therefore, this is why life insurance comparison can be a really useful way of finding the right life insurance for yourself.
It allows you to find a range of life insurance quotes in one place from different insurers, which obviously puts you in a great position in terms of finding the best deals. Some may include free vouchers, free cash back and more, so it’s definitely important to look for the life insurance that is just right for you.