Factors to consider when determining premiums to be charged

  • Health of the person.
  • Frequency of occurrence of previous losses.
  • Extent of the previous losses.
  • Value of the property insured.
  • Occupation of the insured
  • Age of the person of the property in question
  • Location of the insured(address and geographical location).
  • Period to be covered by the policy.
  • Residence of the insured.
  • Insurance pool-this refers to the sum of money all the premiums paid by the clients of an insurance company at any time.Compensation is made from this pool.
  • Sum insured-this is the amount of money stated at the time of taking out an insurance policy as the compensation to be paid to the insured if or when the insured risk occurs.
  • Loss-this is the value of the property destroyed by the occurrence of the insured risk.
  • Compensation –this is the value of the insurance or protection given by an insurance company to the insured to restore him/her to the financial position he/she was in before the occurrence of the insured risk.
  • Insurance policy-this is a document which contains the details of the agreement between the insurer and the insured.
  • Policy holder-this is the same as the insured and refers to the person who enters into an agreement with an insurer for insurance services.
  • Annuity-this is a fixed amount of money that the insurer pays the insured.

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