Life insurance rates are calculated with advanced mathematical formulas that take into account a wealth of information. The insurance companies in Albany, New York draw upon statistics from national databases and use their own local experience to determine rates. They must take into account the mortality (or morbidity) rate, assets and liabilities, market trends and coverage, as well as other factors when performing risk analysis.
The mortality rate, or morbidity rate, is actually only a small portion of the overall picture that life insurance companies must consider. They use statistics to determine how long an individual will live, on average. This part of the formula must take into account personal health, occupational hazards, life expectancy in Albany and more.
Assets and Liabilities
Life insurance companies also must consider their own assets and liabilities before issuing a policy. For, companies that are positioned conservatively might be willing to take on more risk, but companies that have many liabilities and few assets might have to curtail the policies they offer. Insurance companies must keep a specific ratio of these, by law.
The premiums life insurance companies do not just sit under a giant mattress. After paying administrative costs and paying out claims, insurance companies invest these premiums. Therefore, insurance companies must be able to forecast market trends and predict how their investments will fare.
Finally, the coverage of a policy directly affects its premium. Insurance companies take on additional risk when you select higher levels of coverage… The premiums must cover this additional risk.
If you would like more information about life insurance, contact us. As an independent agent, we are able to shop around and find the best policy for you.