If you have looked around for life protection and have applied for term insurance quotes, you may have noticed that they may differ among the providers. This may have you wondering what goes towards your quote. Does the insurance company just make a haphazard guess and choose the first figure that comes into heads? Actually, they make the decision based on several different factors concerning you.
Factors that may contribute towards your quotes
Typically when taking out an insurance policy you are asked briefly about your health, sex and your age. However if you are interested in the quote, the insurance provider typically then goes into much more detail and wants to know a great deal more about you, so they can charge your premiums based on how much of a ‘risk’ there is of you dying!
Here are some of the factors they may consider which typically counts towards your term insurance quotes:
• your family’s health background may be may be given some thought as some illnesses and diseases are often hereditary and so you may be a bigger risk to the insurance provider. Such illnesses and diseases as heart attack, stroke, diabetes and asthma in the family may be of concern and may or may not sometimes increase the cost of your insurance premiums;
• if you are overweight or considered to be obese for your height then this may also mean your insurance quotes are higher. Typically this is down to the fact that you are seen as being a bigger risk if you are overweight;
• what you do for a living may be a consideration that determines how much you pay for your term insurance quotes. If you are a window cleaner and clean high-rise tower blocks from platforms, then you may be considered as being a bigger risk than if you have an office job;
• any sports that you take part in or hobbies which are seen to be risy may mean you pay more for your life insurance. If you like to go parachuting, snowboarding or skiing in your spare time you may pay more than someone whose hobby is chess or who reads in their spare time;
• generally if you smoke or drink your insurance premiums may be higher than someone who is teetotal. The insurance provider may ask you how much tobacco you smoke per month or how many units of alcohol you drink each month. Sometimes, the higher the amount, the more you pay in premiums. While these vices boost up your premiums, it is important not to lie at the time of applying for cover. If for example you were to die due to lung cancer or liver disease and you smoked or drank a great deal but said that you did not on your original life insurance application, the provider may not pay out on your policy.
Any of the above may affect your term insurance quotes. Of course, the amount you choose to insure yourself for (the ‘sum insured’) is a big factor that determines the cost of the insurance. Typically the more you choose to insure your life for the more you pay in insurance premiums. With this in mind you may want to consider this amount very carefully to make sure that you do not over-insure (ie take out more insurance than you need) yet do not under-insure (ie not take out enough)!