How to calculate premiums?
Insurers are willing to have to lowest risk possible before making the deal with you. The actuaries calculate the risk with the help of a huge database of statistics to make sure they won’t lose on the business. What does that mean?
In case of a life insurance they want to make sure that you won’t die prematurely, which could be determined examining your lifestyle, medical history and current health. After receiving these data you are classified according to the statistical tables, which will show the risk and therefore the premium payable.