At first glance, it seems questionable that insurance companies charge different rates to different people for the same policy. This may even raise questions about whether the practice of assigning lower premiums to some individuals and higher rates to others is fair. However, insurance companies are in a delicate position, as their primary role is to disburse funds that their policyholders don’t have to cover expenses they can’t afford.
What Does Secure Insurance Group Base Premium Costs On?
Insurance companies (such as Secure Insurance Group) have to charge premiums according to the odds of a particular policyholder filing a claim, which may require the insurer to relinquish thousands (or even hundreds of thousands) of dollars to cover costs for an event such as a car crash, death, fire, or other catastrophe. The following are factors that insurers look at when assigning premiums.
How Secure Insurance Group Assesses These Factors
At Secure Insurance Group, we examine details about you while also giving you the fairest price. When you sign up, it’s fast and easy. We insure individuals from all walks of life and experiences.
Age
Age is just a number – except in the world of insurance. In terms of life insurance, the older you are, the shorter your life expectancy, which also means that there’s less time you’re expected to make premium payments. Insurance companies rely on premium payments to stay afloat. In order to compensate for this limited time, older policyholders pay more than younger individuals.
Health insurance also charges older individuals more – not because of a shorter life expectancy, but because the insurance company will have to cover healthcare expenses more frequently as the policyholders experience more medical problems.
Premiums don’t always steadily increase with age, though. Car insurance is a prime example of this. With car insurance, younger drivers have higher rates because of a lack of experience, which increases the likelihood of collisions. Insurance companies charge lower rates for older drivers, as their experience and maturity translate to lower chances of causing accidents. However, premiums begin rising again for those 65 and older due to age-related decline.
Location
Insurance costs more in certain areas. If you’re in an area that’s prone to natural disasters, has a higher crime rate, and/or has more frequent claims, your premiums will be higher than they’d be if you lived in a less densely populated area with a low crime rate and infrequent claims.
Gender
Women typically have lower rates than men when it comes to auto insurance and life insurance. Statistically, women live five years longer than men, and are less likely to engage in risky driving practices such as driving at high speeds and not wearing a seatbelt.
Gender doesn’t have the same impact it used to with health insurance. In the past, women paid higher rates due to the expenses of child bearing. That changed with the Affordable Care Act (ACA). Now, gender does not factor into cost with plans purchased from the ACA marketplace. However, women may still encounter higher rates with short-term health insurance policies.
Tobacco and Alcohol Use
Tobacco and alcohol use have an especially strong impact on how much you’ll pay for health and life insurance. Both can shorten your lifespan, which like old age, means a shorter amount of time you’ll be able to pay premiums. In terms of health insurance, the health problems associated with tobacco and alcohol use can result in more health insurance claims.
Hobbies
Dangerous hobbies, such as skydiving, skiing, rock climbing, and bungee jumping, particularly affect life insurance because of the risk of accidental death. By contrast, someone who doesn’t participate in extreme activities would pay less due to not having the same risk of dying from an accident related to a risky hobby..
Driving History
Your driving history can reveal how much of a risk it is for a company to insure you. For those who have clean driving records, insurance premiums will be lower. On the other hand, individuals with a history of causing car accidents and violations will have higher rates.
The Policy You Choose
While the details about you have a strong influence on how much you’ll pay in premiums, the particulars of your policy also play a role in your monthly payments. Policies with greater coverage will have higher premiums to match the extensiveness of that coverage.
Likewise, opting for a higher deductible (the amount you pay before your coverage kicks in) can decrease the amount you’ll pay in premiums.
Get The Best Policy For The Lowest Price Today
At Secure Insurance Group, we will help you find affordable coverage no matter who you are. We want you to have the policy you need with the most affordable premiums. It’s never too late to get coverage. Call us today at 877-871-7328.
