How is the bonus for the whole life insurance calculated?

The whole life insurance premium is the money paid to the life insurance company in exchange for the promise of the company to pay the set amount in accordance with the policyholder's instructions after the death of the insured person. Many factors affect the amount of premium, the most important of which are age, sex, health and lifestyle of the insured. Other factors include the costs of selling and maintaining policy, as well as the establishment of the savingship of policy, called monetary value.

Age, gender, health and lifestyle of the insured are taken into account by the insurance company or carrier if the first time is submitted for insurance. On the basis of the information provided, which the carrier may decide to verify by sending the applicant to his doctor for the exam, the carrier may have a very good idea of ​​how long the applicant can be expected normally. The carrier also knows, on the basis of an insured -Matematic analysis of mortality, how many people can be expected to die the age of the applicant in the current year. Is the responsibility of the carrier to meetThe demands on the enjoyment of the death of this percentage of their policyholders at the same age, gender and lifestyle as the applicant who determines the bonus charged for life insurance. Lifestyle problems may be particularly influential, and the use of tobacco is particularly considered to be the main factor in the life length of life.

For example, if the carrier has 1,000 women, non-smoking policyholders at the age of 30, with an average of USD $ 25,000 (USD) benefit for policy and insurance-mathematical analysis of the carrier suggests that 10 of them or 1%will die this year. Therefore, in order to fulfill the benefits of the benefits for the death of $ 250,000 per year from this group, or $ 250 per person - or $ 10 per $ 1,000 insurance. This is the rate or "insurance costs", the carrier charges a 30 -year -old, non -smoking female applicant. Insurance costs increase annually, because the population ages; A group of people aged 40 years of age will have a higher mortality rate than a similar group of people aged 30 years.

Other items except insurance costs are included in the bonus for the entire life insurance. Dangerous professions, such as firefighting and enforcement, as well as dangerous hobbies, such as Skydiving or running motorcycle races, may have a dramatic impact on the life insurance bonus if the carrier even agrees to publish politics. The cost of sales is also included in the entire life insurance and can be significant. Some carriers pay up to 110% of the premium for a certain life insurance premium for their sales agents, although most of the commissioned life insurance are between 40% - 70% of the premium for the first year. Administrative costs are also included in the bonus of the entire life insurance; Things such as rent and compensation of administrative employees. The carrier also includes an amount in a bonus asprofit.

Another main part of life insurance premium is the amount of savings, which is the amount of money invested and left to this policy as a "monetary value". Over time, this can grow to a significant amount and the whole life insurance is often promoted as an investment that policyholders can use to retire their retirement. Cash value is an asset that can be borrowed or used as collateral, subject to some restrictions deposited by the carrier. People in retirement with the entire life insurance can borrow or just reduce it. The paid advantage of death will be reduced by all amounts laid and also by any outstanding loans. Senior Citizens does not have the same life insurance needs as their younger counterparts, but according to supporters of the entire life insurance, this is not a disadvantage.

The attractive feature of the whole life insurance is that if the bonuses are paid in time, it remains in force throughout the life of the insured and the bonuses remain onthe level of level. Since the cost of insurance can be increased annually, the carrier maintains the entire life insurance year after year by reducing the amount of premium payment, which contributed to the money value as the costs of insurance increases.