The Basics of Buying Car Insurance
What is Life Insurance
Life insurance provides a tax free pay out when you die. You can leave this money to your family to help them survive financially in the event of your passing. Policies are available in a wide range of amounts in order to ensure the financial security of your family. If you the main source of support for your family you may with to choose a larger policy, whereas if you are not the primary breadwinner for the family you may wish to have a smaller more affordable policy to cover funeral costs.
Agent vs. Broker
There are two main ways to purchase life insurance. One way is to purchase from a life insurance agent. Insurance agents are licensed to sell and represent one company. If you would like to receive multiple quotes from multiple companies, and deal with agents, you must find a different agent for each quote.
Many people choose to purchase their life insurance through a life insurance broker. An insurance broker deals with multiple companies and they can provide you with many different quotes at the same time. A broker will also be able to provide ongoing advice so as your life situation changes, the broker can continue to monitor the insurance market and find you the right solution.
Factors That Affect Your Rates
Insurance premiums are based on the risk of the insurance company having to pay out a claim. Just as when you purchase car insurance, the insurance company will look at how likely they are to pay out, based on your driving history. Life insurance companies will set your insurance rates based on their risk of having to pay out because you die. Some of the most common factors impacting your rates are:
- Your age: Simply the older your are the more likely you are to die. The premiums for someone at 65 vs someone at 18 are going to reflect that the person at 18 is much father away from the end of their average life span.
- Your health: This will include both your current health and your health history. Factors such as a history of heart disease, cancer, or other health issues that will increase your risk of death will make you have a higher rate than if you are in good health. As well health conditions impacting your health, behaviours such as smoking can also increase your rates as they have a negative effect on your expected lifespan.
- How you earn your living: If you work a dangerous job, your rates may be higher than if you work in a safe work environment. If you are a professional stunt person you will probably be paying a lot more than a receptionist.
- Your family history: If you family has a history of dying young or having heart disease or cancer your life insurance company may take this into account and charge a higher premium than if you had a healthy long lived family.
- Your types of policy: If you are young and purchase a short term life insurance policy you will most likely pay a smaller amount than if you purchase a whole life insurance policy as the chances of you dying during the duration of your term are relatively low.