How Are Insurance Premiums Calculated?

Insurance companies never take a risk when it comes to setting the rates for an insurance policy. They try to ensure that you won't die unexpectedly because they do not want to pay more than you paid in.

Risk Factors…
Insurers pay special attention to whether you suffer from any of the risk factors such as smoking tobacco, cholesterol levels, obesity, diabetes, and other conditions that could lead to poor health and a quicker death.

To determine your health, you will have to give your medical history and undergo a physical exam. If you furnish the insurance companies with incorrect information they could cancel your insurance policy. Or if you hid the fact that you chain smoke until you're diagnosed with lung cancer, the insurance company is likely to deny the death benefits to your policy.

A doctor chosen and paid for by the insurance company will take your physical exam. He will check your weight, blood pressure and other vital signs. X-ray or EKG, blood and urine samples will be taken and tested for any sign of disease, especially for HIV virus, cholesterol level, and for any indications of diabetes, kidney problems, hepatitis and other problems. Samples can also tell of nicotine content, medications and also whether illegal drugs being taken.

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