Summary: Find out what risk factors Ontario insurance companies consider before selling a life insurance policy.
If you’re thinking about buying life insurance and you live in Ontario, you probably have some concerns. Perhaps you’re wondering if you even qualify for life insurance, or you’re worried about what could stop you from getting coverage.
Cost is a life insurance factor that is very important. If you’ve never bought insurance before its perfectly normal to wonder if you can afford it. You don’t know how much it will cost annually, or if there are different prices for different people.
In this article, www.insureye.com wants to explain life insurance factors in Ontario with the primary focus being on risk. The most significant factor carriers are concerned with is how much risk they’re taking on by selling you a policy.
To assess how much risk they are taking on, life insurance application questions include:
• Why does the applicant want life insurance? There are many reasons why individuals want life insurance, so carriers want to know the reasons why they’re buying it, and how much they want to buy. Asking “why” rules out possible fraud scenarios. For example, a disgruntled partner taking out a million dollar policy on a middle-class labourer can be a red flag.
• Lifestyle and profession: Ontario life insurance companies want to know if you live conservatively, and how dangerous your job is. They don’t want to sell a policy then have the insured die suddenly due to an accident because their hobby is cave diving, and their job is a white water rafting guide; as opposed to an accountant who collects stamps.
• Travel: The risk factors for travel are the mode of travel, which countries an individual goes too, and how often they travel.
• Driving History: A bad driving history is a red flag to life insurance companies. Their main concerns are impaired driving, drug-related defences, and license suspensions.
• Criminal Offences: Incarcerated individuals can’t get life insurance.
• Bankruptcy: A major risk for Ontario life insurance companies is if an insured can pay their premiums. Bankruptcy can indicate the applicant has had or currently has financial problems.
• Gender: Women tend to live longer than men, although not by much. Life insurance companies typically charge women lower premiums than men because they will pay their premiums longer.
An applicant’s health is a key factor, because policies and rates depend on how much and how long the insured will pay life insurance. The following are factors you carrier needs to know
• Smoker or non-smoker
• Age
• Weight
• State of current health
• Previous health history
• Family health History
Since life insurance companies are businesses, they want to keep their risks low so they can make money. They’re not evil, they just need to be business savvy.
The rates Ontario life insurance companies charge are based on each individual’s risk, and on the company’s underwriting policies; thus, rates differ among companies – sometimes significantly.
It is important to note, however, that not checking off positive answers on your application doesn’t automatically bar you from getting life insurance. There are no medical, term, and permanent policies available, so there is a policy out there for everyone. To find out more about these products and which one is best for you, check with a life insurance broker.
The info provided by InsurEye