Insurance Rate

Insurance rates are decided by a number of factors, some of which can be controlled and others which cannot be altered. The essential thing to remember about insurance rates is that they reflect risk to the insurer. If it is possible to reduce this insurance risk, then the insurance rates will usually also fall.

Life insurance rates are decided overwhelmingly by demographic factors that are hard or impossible to alter. These include factors such as age, gender, place of residence and occupation. Term life insurance rates are more heavily influenced by these factors; this is because term insurance rates usually affect healthy and relatively young wage earners where health factors are less of an issue.

However with life insurance rates, health and lifestyle factors can reduce the price. The biggest factor in this is smoking. Smokers have a far higher chance of dying at an earlier stage and this is reflected in the insurance rates. Giving up smoking, and not taking smoking up again, is a very good way of reducing life insurance rates. Other health issues play a lesser, but some times quite real part in setting life insurance rates. Some life insurers will ask questions about diet and exercise regimes which may affect the life insurance rate they are prepared to offer. One aspect of fitness that can increase a life insurance rate is the participation in dangerous sports, which can include skiing and mountaineering as well as hang gliding and abseiling. Many insurers offering the best life insurance rates will refuse to cover people who participate in these sports.

Health insurance rates are similarly influenced by demographic factors, although there are voluntary lifestyle elements which assume more importance. These lifestyle elements concentrate particularly on smoking and drinking alcohol, although exercise and general diet can be a factor. Although life insurance also includes these factors it give them a lower weight than health insurance does.

One thing that can affect health insurance rates in particular is previous enrolment with the insurance company. Health insurance companies will tend to keep rates lower for a person of a certain age and health profile who is already enrolled on their program than someone who is not enrolling for the first time. This means that in many cases it can be a good idea for a person to sign up to a health insurance policy younger than they otherwise would as their health insurance rate later in life should be considerably lower.

Homeowners insurance rates are heavily influenced by location, particularly how susceptible a location is for either crime or natural disasters. There are factors such as security and build quality which can radically affect the rates. Security can mean having approved locks on the doors and locks on all windows. Although the best homeowners insurance rates are for houses that fit these locks, policy holders should be careful that they are not taking out a policy under which they can not claim. If they say falsely claim that they have certain locks, even in good faith, and they do not have these locks then later claims may be invalidated. This is the case even if the locks are not material to the claim itself.

Auto insurance rates and motorcycle insurance rates are often decided by the perceived risk of a driver. However different insurers specialise in different drivers and it is a good idea to compare auto insurance rates using an insurance comparison site to find the lowest auto insurance rate. Other aspects to consider are the type of car that is being driven, the mileage of the car and any alterations. High mileage can be seen to increase risk of accidents, and although itís important not to over-state the annual mileage, itís also important not to understate it as an understatement can have invalidate a later claim.

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