Insurance premiums are almost like a good old friend. They’re always with you, although you know that they may only visit you once per month. Everyone knows what they are, but not many people know how they work and why they’re so low, or so high. This article will help you understand everything you need to know about insurance premiums.
What affects your insurance premiums
There are a lot of factors out there that can affect your insurance premiums. Here are some of the most important:
- The size of your deductible;
- Your age;
- The type and amount of risk;
- The amount of coverage;
- Your medical history;
- Your past and current lifestyle.
Important facts about insurance premiums
If you didn’t know it already, insurance policies can be issued at the group or individual level. Group insurance requires minimal underwriting, because the entire group is afforded coverage based on a relatively average premium rated. That rate is determined by the class of people being covered.
With individual policies, the insurer looks at the individual to determine the risk. This is where the factors mentioned above come into play. If you’re lucky and the insurer thinks that there’s little to no risk for you to actually make them pay, you can get a really low premium. If not, your premium may be high.
Also, no matter what type of insurance you have, if your deductible is low, your premiums will be higher. And vice versa.