How Are Insurance Premiums Calculated?
Insurance companies never take risks when setting the rates that you will pay for an insurance policy. They try to ensure that you won't die unexpectedly because they do not want to pay more than you paid in do.
Risk Factors…
Insurers especially scrutinize whether you suffer from any of the risk factors such as smoking tobacco, cholesterol levels, obesity, diabetes, and other conditions that could lead to poor health and a quicker death.
After they estimate the potential of these risks, insurers will designate your status (using a title such as preferred or standard) based on age, gender and health, and this status determines the amount that you will be required to pay for your life insurance.
To determine your health status, you will have to give your medical history and undergo a physical exam. Make sure to fill accurate details in the health questionnaire. If you furnish them with incorrect information insurance company could cancel your insurance policy. Or if you hid the fact that you are a chain smoker until you're diagnosed you're dying of lung cancer, the insurance company is likely to deny the death benefits of your insurance policy
However risk factors such as gender or age cannot be controlled. Women generally have a longer life than men, so women have lower rates on life insurance and men pay a lower rate on an annuity. As regards the age factor, younger people will pay insurance premiums for a longer period till they are likely to die but because they are healthier, pay a lower rate than an aged person is. Your family medical history and lifestyle can play a major role in maintaining or ruining your physical condition.
A doctor chosen and paid for by the insurance company will take your physical exam. He will check your weight, blood pressure and other vital signs. X-ray or EKG, blood and urine samples will be taken and tested for any sign of disease, especially for HIV virus, cholesterol level, and for any indications of diabetes, kidney problems, hepatitis and other problems. Samples can also tell of nicotine content, medications and also whether illegal drugs being taken.
How To Insurance Companies Set The Rates?
Depending on the condition of your health and calculated risk of other factors that can be controlled every insurance company decides whether you are a preferred-plus, substandard buyer or any category in between. Then set rates accordingly. Inform you're agent if you have any of the risk factors when discussing your life insurance policies as he will know what rates are being charged by insurers for specific risks, and is capable of finding an insurance company that doesn't hike premiums for a particular condition. If it's a controllable risk factor, you should try to prevent and eliminate it. Quit smoking. Lose some weight. Take your blood pressure medication regularly. As your health improves give proof of this to the insurance company to try and lower your rates because an insurance company will never increase the insurance premium, but can definitely decrease it.

Original article on SpectrumInsuranceGroup.com