Understanding what this means can help you find the right type of life insurance for you and your family.
Haven Life and its approach to life insurance (innovative use of technology; providing an experience that is fast and enjoyable) is new, but the very concept of insurance is very old and dates back to around 3000 BC, when Babylonian traders and Merchants began to merge money to protect themselves financially from loss (which was often caused by pirates). During the 5,000 years that have passed, insurance products have become more sophisticated, but the insurance contract has remained at the core.
This raises two questions: What is a guarantee, in any case? And how does it affect you?
"Warranty is a risk assessment", says Laura Boylan, Haven Life's head of warranty services. Basically, an insurer assesses the risk of an applicant, decides whether their company should insure that person, at what price and to what extent. "This applies to all types of insurance," says Laura, including homes where the "risk" would be damage to a property; auto (damage to a vehicle); and of course life insurance, where what insurers call "risk" is usually called "death" by the rest of us.
Although the idea is simple (evaluate risk, attach a price to it), risk assessment and insurance process have become particularly complex in recent decades. The modern life insurance policy began with the industrial revolution in the 19th century, but the insurance process was fairly basic until the 1940s. Until then, insurance premiums were based entirely on age. Subsequently, insurance companies also began to consider gender (mortality in men is generally higher than the proportion of women). However, with the advent of more technology and more data from the second half of the 20th century onwards, the range of factors that insurers consider to have expanded, as well as their ability to consider them in detail.
In this article:  Rating classes
Insurance and insurance in general are based on the "law of big numbers", says Laura. "We can not know an individual's risk level exactly, but we can get good precision for a group of people if the group is large enough." Therefore, insurers look at an individual in terms of age, health, behavior and other factors, and then assign the person to a certain "risk bucket". These are called "interest classes" in the insurance world. While you are offered insurance tailored to you, it is actually based on the class class you have been assigned, based on your individual information.
So what do insurers consider to put people in price ranges, and therefore decide what policy you will be offered?
Your physical health
Physical health is also another factor considered in the insurance guidelines. "For life insurance, we look at a number of dimensions, one of which is medical," says Laura. "We take self-reported medical histories, data such as prescription history, family history, tobacco use and evaluate everything to gain a deeper understanding of the applicant's health." Sometimes a medical examination will be included in that information, even if “at Haven Life, we have a medical examination process that allows some applicants to receive an offer in as little as 40 seconds. It is a wonderful experience for people who qualify, says Laura. For applicants who need an examination, she has some useful advice: “Just because you may need to have a medical examination does not necessarily mean that your premium will be higher – it just means that the company does not have enough specific information to be sure of its decision. without liquids.
Your financial health
"There is also an economic element to your risk assessment: make sure that an insurance policy is suitable for an individual's financial situation," says Laura. Obviously, an insurance company wants to know that a person has the income to afford their premium, but beyond that, can a person be overinsured? "We want to make sure the death benefit is appropriate," says Laura, "just to make sure all the incentives are adjusted properly."
Another factor that insurers consider is behavior, which includes "driving history, professional history and hobbies," says Laura. Not surprisingly, a firefighter who competes with motorcycles in his spare time will usually pay more for life insurance coverage than someone who works in an office and spends weekends in his garden. But for less extreme examples, is not the idea of danger subjective? How do insurance companies define "risky"? "It's a combination of different data from different industries and different levels of expertise," says Laura. “For example, at Haven Life, we have doctors who assess specific diseases and how they relate to risk. Each individual situation is different. It can be as nuanced as, for a particular type of cancer, looking at the size and grading of the tumor and the likely development of that disease. When it comes to behavioral risks – factors such as driving history and hobbies – there is also data that correlates these types of things with mortality. The life insurance industry as a whole has an enormous amount of data that correlates these efforts to death results that go back decades. "
But while" on most things, there is fairly clear agreement on what is risky and what is not, insurers take a slightly different perspective on the margins, says Laura. “Some carriers are very risky for certain hobbies. It can only have been a statement they saw [which made them that way]. Similarly, some operators feel that they have data to support a looser stance on a specific risk. Sometimes there may be a specific insurer or doctor in your company who really has the expertise you need to evaluate a specific risk. There are also different philosophies in different companies. The use of marijuana is an example where different companies have moved at different speeds over time. Some carriers are taking a conservative approach and others have loosened up as it becomes legal in more states. ”
These“ different perspectives on margins ”mean that if you are a life insurance offender – risky behavior or job; difficult medical situation – it is best to shop. Laura says: "For people who have serious medical conditions, there are specific insurance brokers who support themselves by knowing the differences between different carriers and helping high-risk applicants to find the carrier that sees them best."
Even if you & # 39; is not a high-risk applicant, we always suggest that you shop at the best price and service before choosing your life insurance. A little extra time ahead can pay off considerably when it's time to choose coverage.
It is important to be honest in the application process. The issuance of the insurance or the payment of benefits may depend on the truth of the answers you give in the application.
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Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We think it can be refreshing to navigate decisions about life insurance, your personal finances and general well-being. ). We believe that navigating life insurance decisions, your personal finances and your general well-being can be refreshingly easy.
Our content is created for educational purposes only. Haven Life does not support the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.
Haven Life does not have the right to provide tax, legal or investment advice. This material is not intended to provide and should not be relied upon for tax advice, legal advice or investment advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Haven Term is a term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by the Massachusetts Mutual. Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a simplified Life Insurance Policy Issue (ICC19PCM-SI 0819 in certain states, including NC) issued by C.M. Life Insurance Companies, Enfield, CT 06082. Numbers and functions for insurance forms and riders may vary by state and may not be available in all states. Our California agency license number is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best company as A ++ (Superior; top category 15). The rating is from Aril 1, 2020 and may change. MassMutual has received different ratings from other rating companies.
Haven Life Plus (Plus) is the marketing name of the Plus Rider, which is part of the Haven Term policy and offers access to additional services and benefits free of charge or at a discount. The driver is not available in all states and is subject to change at any time. Neither Haven Life nor MassMutual is responsible for the provision of the benefits and services made available under Plus Rider, provided by third party providers (partners). For more information about Haven Life Plus, visit: https://havenlife.com/plus.html