What does premium mean in life insurance?
An insurance premium is the amount of money an individual or business pays for an insurance policy.
Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance.
Once earned, the premium is income for the insurance company..
What is an insurance premium?
Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.
How is life insurance premium calculated?
The process of underwriting determines your life insurance premium. In the underwriting process, various factors are taken into consideration like your age, gender, occupation (whether or not you are associated with a risky profession), lifestyle, policy tenure, any hereditary diseases in the family, and so on.
Do you get your money back at the end of a term life insurance?
If you outlive the policy, you get back exactly what you paid in (with no interest). The money back is not taxable. With a regular term life insurance policy, if you are still living when the policy expires, you get nothing back.
What affects life insurance premiums?
8 Factors That Affect Life Insurance PremiumsAge. Your date of birth is the top factor affecting your life insurance premium. … Gender. Women tend to live longer than men. … Health History. … Family Health History. … Smoking. … Hobbies. … Occupation. … The Policy.