1 year, 6 months ago
via insurance-qna.com
Is life insurance risks figured differently than auto insurance?
How are life insurance risk calculations different than auto insurance risk calculations? Can I qualify for a lower rate for one type of insurance over another? Where can I research risk factor [[calculations?
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M$1 Answer
Life insurance and auto insurance are very different animals. The risk for each type of insurance is calculated differently. Life insurance is based on your health, age, and lifestyle. The company is basically trying to determine your life expectancy. It does not behoove them to provide you with a low cost policy if you are likely to die in the near future. The insurance company is banking on you paying into the system for a long time before ever being able to cash in.
Auto insurance has much more to do with your accident history, classification of license, and where you live. This takes into account not only your abilities but those of the surrounding drivers and how many people you will be driving near. In addition, they consider the crime rate as well since they will have to cover the car if it is stolen.
You can qualify for much lower rates in one than the other, though your life insurance rates are likely to increase over time while your auto insurance is likely to go down in cost as long as you stay a safe driver. You can research some of the factors via the sources listed.
Source used:
http://www.advantageoneinsurance.com/life-insurance-risk-factors.php
http://www.carinsurance.com/Articles/content6.aspx
Auto insurance has much more to do with your accident history, classification of license, and where you live. This takes into account not only your abilities but those of the surrounding drivers and how many people you will be driving near. In addition, they consider the crime rate as well since they will have to cover the car if it is stolen.
You can qualify for much lower rates in one than the other, though your life insurance rates are likely to increase over time while your auto insurance is likely to go down in cost as long as you stay a safe driver. You can research some of the factors via the sources listed.
Source used:
http://www.advantageoneinsurance.com/life-insurance-risk-factors.php
http://www.carinsurance.com/Articles/content6.aspx
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
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