Determining Life Insurance Rates: How It’s Done (Part I)

One of the most important factors involved when it comes to purchasing life insurance is the cost, and understandably so. After all, it is the amount of money you will be paying for a policy, and most people want to be sure they’re getting the most for their money.

So how are rates determined? By underwriting. Underwriting is a process of testing and assessing an individual applying for life insurance. Many factors affect the underwriting of a potential insured from age, build and any medications they take as well as illnesses they may have or family history.  Cigarette smoking, high cholesterol, and level of risky activity are all taken into account when underwriting. But underwriting is not a cut-and-dry science, as each life insurance company sees things differently. This is exactly where an experienced independent life insurance agent can be beneficial. An independent agent should be familiar with which companies look more favorably on these issues. This allows them to match you with a company that fits your specific health and lifestyle.