When you ask a life insurance company for how much insurance costs, you receive a pricing estimate for a monthly or yearly premium called a quote. 

How do they determine your specific price? 

It’s been calculated by a mathematical formula that takes things like your age, health and history into consideration.

Your premium money goes into a big pool of money (or “reserve”) that pays out benefits to families when they need it most.

In order to keep the pool of money at the right size to afford benefit payments for everyone that needs them, your premium payment is matched to your risk that you’ll need to use a benefit. Therefore, people in really good health pay less than those in poorer health. 

That keeps everyone’s premiums fair and equitable.

Think of it like a teeter totter – the goal is to keep premiums and benefits in perfect alignment so that we can protect as many people as possible.

Make sense?

If you have more questions about how insurance is priced, send us an email or give us a call toll-free at 855.348.3091.