What is taken into account when calculating a voluntary insurance policy

Compulsory insurance policies are offered by companies at fixed prices, because the tariffs for services are developed by government bodies, and sellers are not entitled to change them. Organizations can realize all their ideas and plans when selling voluntary insurance policies . They are completely free to develop tariffs for their own insurance products, so the prices for similar services are very different from each other. Before cooperating with one of the companies, you need to study the market offers and find an insurer with more reasonable rates.

It is important for the client that the fees for the purchased policy are as low as possible. This is what he must agree with the insurer, who is interested in concluding an agreement no less. After all, customer contributions are the first source of existence of an insurance organization, it is they who pay the expenses of the company. And insurance reserves, which are required for the life of the company, are also formed at the expense of the money of policyholders. In case of voluntary insurance, contributions are specific, the amount fixed in the signed contract cannot be changed until the document expires.

When selling a service, the insurer is primarily interested in ensuring that the profit from the transaction is high. The work of the company can hardly be considered profitable if the collected contributions are enough only to cover the expenses of the organization and payments in insurance cases. These two indicators are the components of the lower border of tariffs. According to them, each company determines the optimal cost of its services, which should not be unprofitable. 

The upper limit of tariffs contains information on supply and demand for a particular insurance product. It is offered at a higher price when there are few sellers of this service in the market, and a huge number of buyers. The product tariff is reviewed by the insurer only when competitors offering the same services appear.

When calculating the upper limit of the insurance product, applicable bank interest must be taken into account. The fact is that insurance premiums are invested in investment projects from which incomes and clients receive. This is a profitable tool to attract the attention of potential policyholders. 

Making calculations of the cost of tariffs, companies do not bypass their own financial condition. If the organization has stable performance, then it sells its services at a high price. This fact should not be considered as a whim of the insurer, but as a guarantee of 100% fulfillment of obligations to the buyer. You need to be afraid of someone who sells products below average market prices, such a generous company is unlikely to please the victim in an insured event.