What Is Allowance For Insurance

During policy issuance people often receive a certain allowance for life insurance. What is it and why you are compelled to pay it?

Extra charge is some kind of payment for increased risk received by an insurance company in case of your insurance.

For example, compulsory motor TPL insurance policy cost in a big city is higher than in a village or in a small township. It’s quite simple. The number of cars in the city considerably exceeds their availability in small townships, and, therefore, the probability of road accident grows many times over.

Policies for people are usually calculated by general rules. But there are some nuances. After all, the probability to get injury or even death for fireman is much higher, than for example, for teacher.

For settlement of such discrepancy the client is asked to fill in the questionnaire. It is necessary to say that all insurance companies estimate this or that person accepted under insurance protection very thoroughly.

Naturally, if human life is connected with risks the policy is sold with a certain extra charge.

Hobby such as parachuting or snowboard may serve as a reason of certain extra charge. The kinds of sport having the raised injury rate degree are: boxing, hockey and others.

A number of serious diseases can also lead to certain extra charge, and even the big body weight which can entail problems with cardio-vascular system.

A special department at insurance company deals with such risks. The decision is made based on statistics and its analysis allowing to judge about probability of different events in life of this or that person.

Extra charge from police can be cancelled. For example, if person has no excessive weight any more or stopped going for dangerous sports.

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