Income protection insurance premiums vary depending on several factors, including your age, gender, occupation and tobacco user status.
This is because income protection premiums are primarily calculated based on how likely you are to have a claim. The higher risk you are of having a claim, the more you may pay for income protection.
As you grow older, you become more susceptible to injuries and illnesses due to lower motor skill function, lower immune system, etc. This is why you will typically pay higher costs the older you get for income protection insurance.
As a rule, the cost for income protection insurance is higher for women than for men. The main factor is women are statistically more likely to file a claim on their income protection policy. In some cases, these differences can be stark, especially when age is considered.
For example, say you have a male and a female who have the same occupation and are the same age. Because of the gender difference, the woman could pay more than the male for the same income protection benefits. Where a male mechanic may pay $100 a month for income protection insurance, a female mechanic of the same age and with the same policy limits could pay $150 a month.
Certain jobs are considered more high risk than others when it comes to injuries and illnesses. If your job requires physical labor, you will likely pay higher rates than if you had a sedentary job. An accountant, for example, could pay significantly less for income protection insurance than an electrician of the same age and gender simply because of the risks of the job.
High risk jobs may include mechanics, electricians, truck drivers, construction workers and contractors.
If you use any tobacco products (smoking, pipe, chewing tobacco, etc...) it affects your health and many of your insurance premiums as a result, and income protection is no different. Tobacco increases your risk of illnesses and cancers, which increases the likelihood that you will have a claim due to an illness rendering you unable to work. Tobacco users may pay a significant amount more than non-tobacco users for the same income protection insurance coverage.
Contact Brokerage Solutions, Inc. if you have any questions about your income protection insurance limits or premiums. Ask if you qualify for discounts and other ways you can save money on this important coverage.