What is life insurance premium?
premium insurance is the money paid carriers insurance in exchange for which the carrier pays the advantage, usually after the death of the insured person, the recipient appointed in life insurance. The amount of premiums depends on a number of policy -related factors, such as the type of life insurance, the probability of death of the insured during the policy period, administrative costs and the agent's commission. Life insurance premiums are also influenced by the insurer's financial situation, including such considerations as the company's ability to pay the demands that he expects in the short term.
The first factor, the type of life insurance, affects some other factors. Some life insurance, called term life insurance, is designed to remain in force for a specified period of time, usually five, 10 or 20 years. The shorter the term, the lower the cost of life insurance, because the probability of dying of the insured short -term horizon is always less than longer. PremiumE for life insurance for term insurance usually remains at the same level throughout life of politics, although some policies self -compromising deadlines regularly increase premium rates. As soon as this policy expires, no advantage will be paid after the insured's death; That is why the term life insurance specifies the date and time of expiration in a minute.
permanent life insurance, also called the entire life insurance, has no expiration date; It lasts all the life of the insured or the 100th birthday of the insured, depending on what comes first. If the insured reaches the age of 100 years, it is allegedly considered to be questioned and the full advantage is paid to the insured; If the insured dies before the age of 100, the full advantage is paid to the beneficiary. Life insurance premiums for the whole life insurance are generally higher because parties have invested on behalf of politics and postsTL policy of monetary value to which the owner of politics can approach. There are other different types of life insurance, which include the functions of terms and whole life insurance, but these are two main types.
The main factor affecting the amount of life insurance premiums is the risk of submitting the insurer or the probability that the insured will die before the insurance expires, which will launch the payout of the benefits. Therefore, the term life insurance for young adults is so cheap. Because statistics suggest that people at the age of 20 can expect to live the last age of 70, even a 30 -year life insurance represents a good risk to insurers, albeit insured and is also in this category. The life insurance premium is higher because it is certain that the insured will die, but other factors related to the insurer's financial situation help maintain the costs reduced. For example, not only that most of the terms of life policies expire without being paid any healingODA, many policyholders abandon their coverage. Bonuses paid for insurance contracts are no longer valid, but they certainly reduce the costs of insurance of active policyholders, because the carrier's ability to pay the expected claims in the short term is a factor in the determination of premium rates.
There are other ways that the carrier's financial situation affects premium rates. If the economy is good and, for example, the return on investment is high, there is little pressure on the rates on the carrier. Carriers who issue insurance of real estate and victims, as well as life insurance insurance, sometimes experience higher than normal demands due to natural causes such as hurricanes or earthquakes, and the resulting drain in their cash reserves puts great pressure to increase life insurance premiums.
Other factors affecting life insurance rates are administrative costs and agents. Of these, the Sales Commission is by far a larger amount. Under certain circumstancesFor some politicians, the agent's Commission can equal up to 110% or more commission of the first year, although commissions ranging from 40% to 75% of the premium in the first year are much more common.