William Penn Life, 2013 (48. évfolyam, 1-12. szám)
2013-01-01 / 1. szám
Moneywise with Jeff DeSantes Understandin unden/vritin WHEN IT COMES to buying life insurance, the younger you are when you purchase it, the more likely your premiums will be lower. Young people are encouraged to purchase life insurance as early in life as possible in order to take advantage of their youth and good health with lower premiums. This makes you think and wonder why premiums are different for younger people and why they can be different for those who are close in age. That's because before you can purchase coverage, you must meet specific requirements. This process is known as risk selection or underwriting. The underwriting process helps the insurer determine the rate you will pay, based on the level of risk you pose. Auto insurance helps illustrate this concept. Good drivers pay less for coverage than do poor drivers. Also, young drivers, who tend to be more at risk, pay more than mature drivers. The key concept is that the amount of premium is based on the amount of risk. Life insurance is similar. For instance, a cigarette smoker presents a higher risk and has a shorter life expectancy than a non-smoker. Therefore, as a rule, a smoker will pay higher premiums for life insurance than will a non-smoker for the same amount and type of coverage. When you apply for life insurance, an underwriter will examine a number of factors based on the organization's underwriting standards and guidelines. These include: • Your current health and physical condition. • Your medical history. • Your vocation. Occupations with higher risk present a higher risk. • Personal habits, including tobacco use and history of alcohol or drug use. • Your avocations and hobbies (private pilot vs. card player). • Your age. A 60-year-old applicant will pay a higher rate than a 30-year-old. • Your gender. Since women have a longer life expectancy, rates for women tend to be lower than those for men. This is why it is very important to get life insurance as early as you can before any health issues arise. Health conditions can cause a person to be rated at a higher premium or even to lose the ability to buy more insurance. But, many people forget this and mistakenly believe, as they age, that their need for life insurance doesn't exist anymore just because their reasons for needing insurance have changed. □ If you do not have a WPA agent, please call the Home Office at I -800-848-7366, ext. 120, and we can assist you in finding an agent who will serve you and your family by offering: • A Review of Your Needs • Life Insurance Protection • Tax-Deferred Annuities • • Juvenile Insurance Plans • Special Fraternal Benefits • Illustration: © Can Stock Photo Inc./nasirll64 4 0 January 2013 0 William Penn Life
