How Insurers Do the Math Regarding Risks

+Risk assessment is a process common to all insurance companies. An applicant’s monthly premium rate depends on just how much of a risk he or she represents to the insurance company.

When calculating risk the insurance company will look at multiple factors and they base their decision to insure you on the data they collect during the application process. Risk factors and the resulting premium can vary depending on the company.

For life insurance the major risk factors are the person’s age and health. The rule of thumb is that life insurance becomes costlier as the applicant gets older. As such, experts often recommend buying life insurance sooner than later to lock in rates. Insurers also take the applicant’s current health and health history into account, since past and existing conditions may present a higher risk of the insured living a shorter than average lifespan.

Occupation is another factor. For instance, those with dangerous jobs face greater risks in the eyes of insurers. The same goes for lifestyle choices like smoking and individuals who are into extreme sports like skydiving and mountain climbing. Family history is also something used to determine your monthly premium. Are your immediate family members; your parents, brothers and sisters still alive? If not what did they die from? Do they suffer with serious illnesses?

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Even if you’re the sort of person insurers would consider a high-risk individual, you’re not necessarily out of luck. A quality insurance broker can help you apply with a company that might be more forgiving of your particular issue. Get one working for you today.