Risk appraisal is a simple concept used by life insurance companies to assess a fair premium cost for people who purchase their products.
Life insurance is based on a rather uncomplicated premise.
It is easier for a group of people to share the cost of an unexpected death than for a single individual to bear the inevitable burden.
The intent here is to fairly evaluate each
individual so that all persons in similar situations fall in the same
category and as a result pay the same premiums for
Had insurance companies not done this everyone would pay the same and that would be unfair.
Want to protect your family with life insurance? Take a Free look at Top Quality Life Insurance Quotes from a Highly Rated Carrier and Save. Click Here For More Info
Insurance companies therefore create criteria which would organize their policy owners in groups based on the results, after obtaining information regarding each applicant.
Policy owners with similar evaluation results are placed in the same category and equally in the risks and rewards of that group.
The intent here is to avoid having one group of policy owners subsidize a group that would be a greater risk. The insurance company, through the process of risk appraisal therefore determines how to best issue a policy(under what terms) and at what price.
The insurance company determines what group an individual should be placed in based on medical history as well as physical condition at the time of application for the policy, personal attributes such as whether or not you smoke, drink excessively, use drugs not prescribed by a physician, driving record or involvement in any hazardous activity.
Risk appraisal helps the life insurance company determine whether the
amount of insurance
applied for is justified by the applicants financial situation. They
want to know your annual income, personal and business.
If large amounts of insurance are requested they may want to see a personal balance sheet(assets and liabilities) or a financial statement.
An inspection report may be conducted, only with your approval,
and you may be asked for references if the policy applied for is very
large or if there is anything is uncovered which indicates that the
company needs additional information.
All these seemingly unimportant things help the insurance companies actuaries arrive at a fair premium for the client. Any information acquired by the insurance company is deemed confidential and is treated as such.
Through risk appraisal all these things are taken into
consideration and an applicant is put into a group based on these
criteria, and if a policy can be issued and an
is then determined.
The lower the risk the lower the premium charged, the higher the risk the higher the premium charged.
Risk Appraisal Criteria
Don't pay too much for life insurance! Shop and compare Quality Quotes from Quality Carriers first. Just answer a few quick questions then get your Quotes. The process is Easy and FREE. Click Here For Free Quotes
Home Non Medical Life Ins Medical Examinations Investing In Whole Life Insurance Mutual Funds Financial Planning Life Insurance Quote Whole Life Insurance Retirement Planning Estate Planning Mortgage Insurance Universal Life Insurance Term Life Insurance Online Low Cost Term Life Insurance Long Term Care Insurance Disability Insurance Whole Life Insurance Quotes Affordable Life Insurance Accelerated Death Benefit Variable Annuities Cheap Life Insurance Compare Term Life Insurance Quotes Life Insurance Settlement Cheap Term Life Insurance Life Insurance Policy Term Insurance Permanent Insurance Term Life Insurance Quotes Online Life Insurance Low Cost Life Insurance Long Term Disability Insurance Whole Life Insurance Quote Term Life Insurance Rates Disability Insurance Quote Life Insurance Rate
Copyright © 2004 - 2019 LifeInsuranceHub.Net. All Rights Reserved.
Life insurance hub is a service dedicated to assisting you in understanding life insurance quotes and how to apply them to your personal life insurance needs.
Death proceeds from 10 year life insurance can be in lump sum form or incomr form
The 5 year term life insurance policy has been around in insurance circles for a very long time. It can be sold as a policy or as a rider to a permanent life insurance policy.
The 20 year term insurance policy is one of the most sought after life insurance policies.
Take a look at 20 pay life insurance. Most people know that you buy whole life insurance if you want to be covered for the rest of your life even if you live to age 100.