Insurance - Page 2

How Does Credit Score Affect Car Insurance Rates?

Not many people are aware of the fact that majority of the insurance companies make use of the credit score in order to determine the amount of money that you can pay as the EMI for the auto insurance premium. The main reason behind doing all this is that the auto insurance companies claim that the one who does not have a proper credit history has more chances of being in a collision or claim. And only because of this supposed risk for the financial loss a customer has to pay more than the original cost of the insurance installment.

You will be surprised to know that even if you have not encountered any sort of accident with your car, but also then you need to pay almost twice for the same insurance that your neighbor pays. And this is only because of the low credit score. It has also been noticed that a car insurance company makes use of a complex algorithm in order to determine the premium of the insurance for the one who has a bad credit score. This entire process is completely different than determining the credit score of a person, but the outcome of both the process is almost the same.

That is if you are supposed to have a bad credit score, then it is obvious that you will high risk. Does credit score affect car insurance rates or not? According to, You can understand this by the recent advertisement of the car insurance company, where they offer a discount to the one who has a good track record of their credit score. On the other hand, the person with an average credit score will have to pay a moderate rate for their car insurance policy.

If you still have a doubt regarding the reason why the insurance company makes use of the credit information to determine the insurance rates, then you need to read the below lines carefully. The insurance company feels that there is a direct relationship between the credit history of the customer and the claim that is expected to occur. Hence, they have made an analysis that a person with a good credit history is more profit for them as they have fewer chances to raise a claim. When you walk down to the market in search of car insurance rates, then you will find that there are some insurance companies who still make use of the driving history, age, type of vehicle and your resident in order to determine the insurance cost. Moreover, if you are about to take insurance for your sports car, then it is likely that you need to pay more for its insurance. If you do not have any credit history report, then you may not find car insurance for you from the companies who make use of credit score to determine the premium of the insurance. But you must keep one point in your mind that a company who does not make use of the credit score to determine the insurance rate will definitely use some other factor.


There are some other methods too that are used by the insurance company in order to look directly to the actual credit report. Some also make use of the insurance credit score; it is nothing but a statistical analysis of the report, which predicts the likelihood of the person to raise a claim. The insurance company makes use of all this process so that they do not run in a loss at the later stage.

How Does Children’s Life Insurance Work?

How does child life insurance work? If you’re planning for your child’s future or thinking about buying insurance for him or her, you should know what it involves and if you must purchase one or not.  Keep reading to learn more in the following.

Life Insurance for Children vs. Adults

What are the differences between life insurance for children and adults? if you’re interested to get one for your child, you might also want to get an idea about what it basically involves.

At the very least, take note that this financial product is bought as a tool for paying funeral expenses.

In other cases, people purchase it as a salary replacement so that the loved ones left can keep their living standards in the event that the policyholder passes.

But for a child’s life insurance, no salary needs replacement. Plus, with the absence of a child, the significantly drop standard of living or the expenses involved would.

It just means it is still possible for you to cover the funeral expenses using loans or your savings without cutting any usual household expenses.

What to consider though before buying life insurance for children are the associated medical expenses and accident cost to pay using your own savings for your kid.

If you don’t have a medical insurance plan to cover for the emergency, you might want to consider life one, which is typically low in cost, for some help.

For one, if the worst would happen, you don’t need to stress about your ability to pay for your child’s end-of-life expenses and funeral with life insurance.

Especially if such emergency funds aren’t readily available, you might resort to applying for a loan. So, if you’re not good at money management, life insurance could be an inexpensive tool to help when you need it.

According to the same also proves true for families without Medicaid plans.  These plans work by providing healthcare coverage to eligible children, low-income adults, and people with disabilities as well as elderly adults and pregnant women.

They are also administered by states and work according to federal requirements.  And usually, they’re jointly funded by the federal government and the state.

Alternatives To Child Life Insurance

Now if you’re looking for alternatives to child life insurance, you can consider other tools that might be able to give more value for your money. Each, however, is dependent on your concern or goal.

Child education plan

If you’re planning for your child’s education and you want to invest for his future, you might want to consult your financial adviser, if you have one, for a 529 plan.  It’s an education plan geared towards higher education costs and can offer some tax benefits.

Is your child old enough to make money with a summer job or an after-school part time?

If you answered yes, then you might want to consider an IRA, and then complement their earnings with contributions. It is a good way not only of planning for his future but also for giving him a head start on retirement.

Custodial account

Do you want to give him a head start on saving money?   If it’s your concerned, you might want to open a custodial account for him. Later when he reaches legal age and has the knowledge on how to manage his finances, you can hand him the account.

Cost by Age

Insurance cost varies. It usually increases per age range you belong to because it is more likely that you’re at higher risk of dying every decade of your life.  As children belong to a lower risk bracket than an adult is, their insurance cost is typically of the same cost from zero to 18 years of age.

Should you purchase child life insurance?

Decide on several factors, including accident cost, your emergency funds and medical bills involved, as discussed earlier. You should also look at your financial situation as a whole, such as your ability to cover bigger risks and having enough savings.

Finally, you might want to consult a financial adviser. However, you should find someone not affiliated with any insurance products for fair advice before thinking about buying one for the child.

There you have what to know about children life insurance. Weigh your options well and determine whether it’s right for you or not.