Life insurance providers look into a wide assortment of factors when calculating monthly premium payments. From the personal information provided by applicants as well as medical exams, the following factors are assessed in the following manner:
- Family Medical History
Family history of serious or chronic medical condition such as cancer, diabetes, and heart diseases can negatively impact life insurance premiums. In some cases, there are minor medical conditions that do not raise insurance premiums.
- Marital Status
One’s martial status will be factored in when calculating premiums. This is especially true if you are applying for a joint life insurance with your significant other. Most joint life insurance policies works on first-death basis. This means that payout will be given when one of the policy owners die. There will be no payout to dependents when the other half passes away.
- Number of Dependents
The amount of protection to purchase will depend on the number of dependents you apply for in the policy. The more dependents you have, the higher your monthly premium payments are likely to be.
When identifying the amount of coverage needed, take into consideration the number of beneficiaries that will use the payout after you die. They should be able to live comfortably, or should be able to live like they used to when you were still around.
- Existing Debts
One major factor when calculating insurance premiums is the amount of debt under your name. This will usually include mortgage, car loans, and unsecured loans such as credit card debts. You will need more coverage if you still have a long ways to go with mortgage and car loans.
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