Why insurance companies charge different life insurance rates.You cannot assume that when you request a life insurance quote from one insurance company, this will be the same as you will receive from all others. Life insurance rates vary from one company to another and from one state to another. They are also dependent on many factors of your life, such as your age, your gender, occupation and hobbies, health condition, the amount of coverage and in the case of term life insurance, the length of the term of the policy.
When you purchase life insurance at an early age, you will get cheaper life insurance rates. The same is true of females taking out a policy. They pay lower premiums for the same amount of coverage as males in the same age and health category. In order to understand why this difference exists among the various life insurance policies, you have to think of the life expectancy statistics on which insurance companies rely to determine the possibility that you will outlive the term of the policy. According to these statistics, women tend to live longer than men and this is why they receive low cost life insurance rates.
When you purchase a policy when you are young, there is less risk for the insurance provider that you will die at a young age and therefore the company will gain a profit by collecting the insurance premiums without ever having to pay out any money to your beneficiaries. In term life insurance, if you outlive the policy you will not receive any refund of the premiums that you paid during the term.
In whole and universal life policies, you will also get a cheaper rate by purchasing the policy at an early age. the insurance company then has many years ahead in which to collect the premiums, which in many cases will total more than the amount paid out when you beneficiary makes a claim.
There are other factors the best life insurance companies use to determine the life insurance rates you receive when you request a quote for a policy. It may be a trade off in terms of paying the premium costs when you will probably be able to save much more money by putting in a savings account for the same period of time. However, you have no idea when you are going to die and there is a possibility that the insurance benefits could be paid out within a year or two of taking out the policy at any age.
Your occupation plays a part in the life insurance rates you have to pay for term life insurance or whole or universal life insurance. If your career is a dangerous one in which there is a greater possibility of accidental death or events that can lead to illnesses causing death, then the insurance provider will take this into consideration. You may have to pay higher premiums for a policy as a result of your choice of career.
When you take a medical exam to show that you are in excellent health, the life insurance rates are much cheaper than if you opt for term life insurance without medical exams. The latter form of policy is available to anyone whether or not you have a pre-existing medical condition.
It is very convenient to purchase with only a few health related questions and you can purchase the policy online without having to wait for the paperwork to be completed. This is why many healthy people who do not want to take the time needed for medical examinations opt for the higher premiums in return for convenience.
