In short an insurance premium is the payment you make to an insurance company to keep your insurance policy active and current. The main insurance categories carry an insurance premium. Health, life, auto etc, all require that the policyholder pay a premium to maintain coverage.
Typically your monthly premium isn’t set in stone. Unless it’s term life, this insurance policy locks you into a set rate for the entire term. At the expiration of your policy the insurance company may want to reevaluate your situation. If your current environment is considered riskier than before, you might encounter higher premiums.
Some factors that determine what your premium may be are in your control. Like the the number of claims you file. And some are not, for example, your age is not within your control. When your policy is being underwritten, the insurance company is evaluating the risk in insuring you and determining a premium amount relevant to that risk.
What is a car, life, health, or homeowners insurance premium? We take a look at each insurance premium below;
Car insurance premiums;
With car insurance the premiums are usually variable. Age, driving history, and location are all determining factors. Your premium will go up if you’re involved in an accident, or have traffic violations.
Most auto insurance policies last six months or a year. Once the policy is ready for renewal, the insurance company will reevaluate your policy by taking a look at your driving history and other determining factors.
Some insurance companies will offer a check back for an accident / violation free history while you’re with them. Check with one of our agents for more details.
Life insurance premiums;
As stated earlier in the article, term life premiums are locked for the term of the policy. The amount you pay is according to how much coverage you need. Other factors are the type of policy and the amount of risk being insured. Risk can be determined by age, if you’re a smoker, driving history, weight, where you work, and your overall health history. Your health is evaluated through medical exams, urine & blood tests.
Health insurance premiums;
With health insurance you make a monthly premium payment, and a co-pay. The lower the premium, the higher you will pay out of pocket. You renew your health coverage annually.
Homeowners insurance premiums;
Homeowners insurance premiums have several determining factors. The homes location, age, size, and build all play a part in coming up with your premium. If you live in an area prone to natural disasters, you may receive higher premiums.
In homeowners insurance there’s what’s called your insurance score. It represents how likely you are to file a claim based on your claims history, credit score, and whether or not your home has security feature ie; security alarms, cameras, fire alarms, weather protection etc.
Wrapping up, for the most part everyone will have an insurance premium that is relevant to their individual situation. To find out ways to save money on your insurance, speak to one of our agents. They’ve worked in the industry for several years and know all the tips and tricks to getting lower premiums! Click here to call us now**