What is the premium?
Insurance premium is the amount of money charged by companies for active coverage. The sum by which the person pays in the premium is also referred to as the rate is determined by several factors, including age, health and the area in which the person lives. People pay these rates annually or in smaller payments during the year, and the amount may change over time. If the premiums are not paid, the insurance policy is usually considered invalid and companies will not honor the claims against it.
What bonuses cover
In general, premiums include everything that is described in detail in the insurance contract, and services provided or paid for dependent on specific insurance and type of protection. Below are the most common varieties and basic services that often cover. Consumers should keep in mind that not all these types of insurance are available or common in all countries and there are many other types. The policy of the policyholder's death to those who are described in detail in the will of the person or the plan itself. Can pay for the funeral UJEdge, outstanding debt, living costs for those who remained behind or other expenditure related to the estate of the deceased.
health insurance often pays for a certain part of the costs of visiting offices, prescription medicines, surgery, mental health services, ongoing treatment and/or emergency services. However, not all of these services are always covered and plans can be very different. The person may have to pay from his pocket for certain services or for a percentage of the costs of the services provided.
car insurance premiums usually cover damages on the policyholder's vehicle, any other vehicles, road aid and/or medical accounts related to the accident. Motorcycle, boat and other types of motor vehicle usually provide the same types of services.
home owners' insurance , which is usually paid annually or as SOPlacing the combined repayments of the mortgage in custody in some countries, usually covers damages for home and its content in the case of theft, fire, storms and many other disasters. Lessee coverage is similar, although it usually pays only for damage caused by the policyholder or damage to the policyholder's personal items.
How rates are calculated
The starting point for premiums is largely based on statistics, although the habits and history of people can cause higher or lower. 22 -year -old man looking for a sports car coverage can often be predicted by a higher premium than a 45 -year -old woman who controls a medium -sized sedan. Both may have excellent driving records, but the insurance company is considering a younger driver in a faster car that is more at risk of accidents than an experienced driver slowly; Therefore, insurance quotations usually differ considerably.
The same philosophy applies to health insurance premiums in countries where the government does not provide health care to its citizens. People withE health problems or who deal with unhealthy activities and people in dangerous areas of work often pay for insurance significantly more than health individuals with safe jobs. For example, non -smokers live statistically healthier lives than smokers and construction workers can have more serious accidents in the workplace than accountants. Therefore, the chairman of the constructions who smokes will usually pay much more in the premium than the CPA non -smoker.
insurance rates also vary by area. Regarding car coverage, companies that provide services in cities or regions that statistically show above normal accidents will often charge more than companies where there are fewer accidents. For real estate insurance, size, and Age property, how close it is to the flood zone, and the chances of bad weather are considered, as well as the amount of money that the homeowner will have to replace their households when the company sets rates.
bonus costs for the same service may be among the providerEven to differ very much, and therefore experts strongly recommend that consumers receive several price offers before committing to politics. People should keep in mind that the lowest cited price for bonuses can be better negotiations, but the insurance does not have to provide major coverage.
What causes rates change
Insurance companies may increase premium rates for any reasons, but one of the most common is a high number of policy claims. The insurer usually consists of how much he will pay for politics in the end; Ideally, they try to pay less than what the policyholder pays off. When a person regularly submits claims against the insurance contract, the Company has to pay more and reduce their profit range. As a result, these costs often increase premiums.
In the same line, the insurer may increase the rates if he expects an increase in claims. If, for example, because she expects her health care costs to rise. Rates can also generally increase as a result of price increases, pay for claims from other policy holders, or keep up with inflation.
For real estate insurance, whether home owner or rental, cases where the property is resonated into the flood zone, earthquake or similar situations can cause rates to increase. Renting a primary residence or maintaining certain animals or objects such as a trampoline or swimming pool, and it can also cause an increase on the land.
Although the most common to increase rates can also be reduced. Some insurance companies offer a good driver discounts, for example, or even lower rates for students who earn good grades at school. Changes or improvements of the insured items may also cause the premium to drop; The house can qualify for a discount if, for example, a fire suppression system has an installed system or a car with airbags can cost less insurance. Many pRescouncing companies offer reduction or reimbursement for lifestyle changes, such as smoking or joining to a gym.
Payments and missed premiums
Insurance premium is usually collected in monthly, semi -annual or annual payments depending on the type of policy. Basers also often have the opportunity to combine their payments with fees for other services or remove several types of policies with one company to reduce the total costs. For example, the purchase of car insurance and a tenant from the same insurance company can give the buyer a discount on both.
If the policyholder fails to make a planned payment, you may choose to completely cancel the plan. This is often referred to as "extinct policy" and the customer will usually be required to either pay the premium balance and be renewed, otherwise the insurance will be canceled. Since the billing cycle may be lengthy in some cases, it is not uncommon for holders to forget to make a payment overd by the onset of politics. In almost all cases, the person cannot claim a claim against policy that is not up to date in premium payments.
Also, the person cannot obtain compensation for his insurance payments, in most cases, even if he never claims this policy. Although it may seem like a waste of money, one great claim can make more than a difference, and having this peace of mind is worth it for most people. However, life insurance works somewhat differently and can be able to withdraw money from this policy, borrow against it or sell them for cash. However, this may have tax consequences and may mean the beneficiaries of the recipient will not receive the same amount of money after the policyholder dies.