What Are Life Insurance Premiums Determined By?
11498 POINTSview profileJason GoldenzweigCo-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, NevadaPremiums for life insurance are determined by a number of factors - some influential factors are mortality tables, the type of product (e.g. term vs. permanent, fully underwritten or non-medical, etc.), the guarantees on the policy, and the carriers' underwriting guidelines (some carriers may be more aggressive, some more conservative), just to name a few.Answered on March 27, 2014flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaThe premium for a life policy are set by two people. The actuary compiles mortality data. From that he develops the premium necessary for the various plans based on a “standard” risk. The second person is the underwriter. The underwriter looks at the application, medical statements and any tests taken to determine if the applicant is “standard.” If the applicant isn’t standard the underwriter assigns factors that result in an adjusted premium. The company makes an offer to the applicant after the underwriting stating the price necessary to put the insurance into force.Answered on March 27, 2014flag this answer
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