November 1, 2018
The insurance policy is a standard contract among the policy holder and the policy provider company, who determines the claims which the insurer is legally required to pay. In exchange for an initial payment, generally known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
For easy understanding between Insurance Policy rate and premium
Rate x Exposure Units = Premium
Insurance rate is the cost of insurance per disclosure to cover claims payments, costs, and commissions and provide for a sensible profit. Replacing a car can depend on a variety of factors, for example when you bought, km of running, manufacturing year, type of car, any modification or repairing has been done or not. PREMIUM is that you pay as a result of the rate multiplied by the number of exposure units you insure. It is that amount which you pay once a month or yearly.
Think of Insurance rate as the number that an insurance company sets as its price, much in the same way a Pizza hut sets its cost per pizza. For example, if the rate per $2,000 of coverage is $15.00 per year and you have a home that would be replaced for $250,000 if destroyed, then the annual premium would be $2,200. Insurance rates are calculated based on risk, or the potential that someone will make a claim. The higher the premium is covering more the risk, the lower the risk, the lower the premium.
What are the various types of life insurance?
You are wondered about know that life insurance policies are two basic types.
Traditional whole life – A whole life is a policy you pay till death of the policy holder
Term life insurance – A policy for a fixed amount of time
For Example: Unit Linked Insurance Plans, Money Back Policy, Whole Life Policy, Term Life Insurance, Endowment Plans
Auto insurance rates will count:
- Safety and theft measurements for your housing area
- The safety features and statistics of your vehicle
- The year, make and model of your vehicle
- Whether you commute to work or use your car for personal or business purposes
- How many driving crimes you’ve had, including past at fault insurance claims
- How many years you’ve been driving
Home insurance rates will reflect:
- Whether your neighbourhood is likely to sewer backup
- The crime rate in your neighbourhood
- How close you live to a fire station and fire hydrant
- The value of your personal property
- Your insurance history
- The claims history of your property
Your rates can also vary depending on if you qualify for any discounts, how much coverage you decide to purchase and the deductibles you choose.
Federal and Provincial regulations apply
Government regulations, taxes, and the cost of health care also affect rate calculations; as these costs change, so do premiums. Likewise, changes in court awards, towing fees, repair costs; insurance fraud and more frequent and severe storms have all influenced rates over time.