What affects term insurance quotes?
If you have looked around for life cover 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. Do they 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 be taken 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 greater 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!
The factors below may be considered when you apply for your insurance:
• your family’s health background may be considered 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 protection quotes are higher. This is generally due to the fact that an unhealthy diet and lack of exercise typically puts you at a higher risk of developing heart disease;
• 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;
• smokers and drinkers typically have to pay higher for their insurance. The insurance provider may ask you how much tobacco you smoke per week 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 when applying for your insurance. 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 reasons states above may contribute towards the cost of your cover. Of course, the sum of money you choose to insure yourself for (the ‘sum insured’) is a big factor that determines the cost of the insurance. The more insurance you need, the more you pay in premiums. With this in mind you may want to consider this amount carefully to ensure that you do not over-insure (ie take out more insurance than you need) yet do not under-insure (ie not take out enough)!
