Life Insurance Premiums
Life Insurance Premiums. How to calculate Life Insurance Premium. Which factors can you control?
Life Insurance Policy Premium
Life insurance policy premiums are usually categorized into preferred, standard and high risk rates. Here are the main factors affecting premiums: habits, health, family history and age.
Age is perhaps the most important factor – while mortality tables suggest that that approximately 2 males per 1000 die at age 25, the number rises to 155 per 1000 at age 85. Insurance premiums are calculated directly according to this probability. The older you are, the higher the coverage premium.
Life Insurance Terms
These important terms explained here are all directly related to your life insurance policy premium. For example, if you opt for higher deductibles, you would be able to get lower insurance premiums.
This is a fee paid with each incident that requires medical coverage. Each time you visit a doctor, or each time you require hospital or emergency room services, for example. The higher the level of copay, the lower the cost of insurance.
This is the amount that you pay as a percentage of costs in addition to your copayment. This varies from service to service. Most insurance policies would require that you pay for 20 percent of the service, while the insurer would pay the remaining 80 percent. Again, the higher the coinsurance, the lower the cost of insurance.
This is the minimum amount below which the insured would pay 100 percent of costs.
For example, if your insurance policy grants you a $1000 deductible, a $10 copay and a 20 percent coinsurance, you would pay all costs up to $1000 a year. Subsequently, you would pay a 20 percent coinsurance of the medical cost, in addition to a $10 copay.