Why is there such a difference in price between insurance carriers for the same level of coverage?
There are several reasons why insurance companies can vary so much in rate for the same types of policies. First, each company segments the market into rate classes. Each rate class signifies the amount of risk an applicant represents that falls into those parameters based on their health and lifestyle. Each insurance company also has its own guidelines as to how to determine these rate classes based on their own studies. These studies are based off of the work of Actuaries, who are mathematicians whose job it is to study statistics of mortality rates. Based off of these mortality rates, risk is assessed and a given rate is determined for each rate class. This is further modified by underwriters whose job is to then study each individual applicant and modify their rate based upon their specific lifestyle and health history. Add onto this an additional layer of complexity which is the particular financial situation of the insurance carrier at any given time and you can see why each comp
