How a quote for life insurance is calculated

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Given that most life insurance quotes begin at a pay out of R1 million, life insurance companies are going to make sure they cover their risk adequately. When you request a quote for life insurance, the company will ask you a range of questions and may ask you to go for a medical exam to assess your risk. That is, the insurance company wants to make sure that you’re not going to cost them money by claiming on the policy before you’ve made enough premium payments to earn the cover.

To do this on a quote for life insurance, they will ask you about your lifestyle, extent of cover you are opting for and the type of life cover you require.

Quote for life insurance based on insured demographics

Statistically men are more prone to risky behavior than women, which is why they are often a higher insurance risk. Men will thus pay more on life insurance than women. Further, the older an individual is, the fewer premiums he or she is likely to pay, and the more risk the insurance company has of paying out a claim too soon. Further, older insureds are more likely to be diagnosed with a dreaded disease and claim on the policy. Younger policyholders thus pay less on a quote for life insurance.

Your life insurer will ask about your medical history to determine your risk of dreaded disease, but also require you to go for a medical exam. This enables them to determine whether you are an insurable risk.

Furthermore, your lifestyle will enable the life insurance company to determine your risk of premature and accidental death. A quote for life insurance will take into account your hobbies and habits. A smoker who hand-glides on weekends is more likely to contract a dread disease and die of accident than a vegetarian stamp collector.

Quote for life insurance based on extent of cover

The bigger the pay out the more expensive a quote for life insurance will be as it costs the insurance company more. The more benefits attached to the cover, the more expensive the quote will be as well as the insurer will have more chances of paying out. Benefits such as dread disease, disability and funeral cover are usually added to a quote for life insurance.

Quote for life insurance based on type of cover

Not only the extent of cover, but also the type of cover, will determine how much you pay on a quote for life insurance. Pure life cover sees the insurance company pay out a claim only if the insured dies before the life portion of the policy expires, which is less risky than paying out for whole life cover. Whole life cover or life assurance guarantees that the insured will be paid out. Even if the life portion of the policy expires, he or she is entitled to a portion of his or her premiums back in the form of annuities which can also be bequeathed.

To get a range of quotes for life insurance, fill in our online form and a Life.co.za representative will contact you to compare all of the above.