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9 Factors That Affect Your Life Insurance Premiums In India

Life insurance is a financial tool that helps secure your loved ones and can serve as a major investment option as well. With life insurance plans, you can secure a large amount of savings by investing a small amount. This amount, called the life insurance premiums, depends on various factors, which can be confusing to understand at first. Therefore, to help you make a well-informed decision, we have created a list of the factors that affect life insurance premium rates. 

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What are the Factors that Affect Life Insurance Premiums?

Here is a list of 9 factors affecting life insurance policy quotes:

Factor Affecting Life Insurance Premium Rates Factor Affecting Life Insurance Premium Rates
  1. Age

    The primary factor that affects the cost of your premium is the age. Life insurance plans are less costly for young people, who have longer life expectancy and are less likely to get exposed to diseases. Thus, it is always advised to buy a life insurance plan as early as possible to secure a large sum assured at the lowest premiums.

  2. Gender

    Gender also plays a significant role in the price of life insurance plans. Insurers offer term insurance for females that are up to 30% more affordable than males. This is because, scientifically and statistically, women tend to live a longer life than men, which means the company has a better chance of receiving the premium payments for a longer term. Thus, insurance providers offer plans at an average of 15% more affordable premiums.

  3. Health/Medical Conditions

    Most insurers request the policyholders undergo a medical exam so that the insurer has a better idea of all their pre-existing conditions and disposition of any potential issues that may arise in the future. If you have pre-existing health and medical conditions, the insurer will increase policy premium rates because of your increased risk to life.
    For example, if you have higher cholesterol levels, it may put you at a greater risk of being diagnosed with heart disease. Therefore, if you have any pre-existing conditions, the insurer may increase your premiums.

  4. Lifestyle Habits (Smoking and Alcohol Consumption)

    Lifestyle habits like frequently smoking or drinking alcohol can increase your premiums. Most insurance providers offer special premium rates for non-smoking customers because the risk of them contracting lung cancer or any other such illnesses due to smoking is decreased. Thus, if you want to secure a large sum assured at affordable premiums, you should quit smoking for at least a year before applying for a life insurance policy.
    Your preference for participating in dangerous sports and affinity for adventurous activities will increase your premium rates during the underwriting period. This is because the risk to your life increases the more you frequently engage in these adventurous activities.

  5. Nature and Type of Occupation

    The premiums charged for self-employed are much higher than the premiums charged for salaried individuals. Along with that, the type of occupation also affects your premium rates, for example, if the customer works as a coal miner, then the premiums of that customer will be higher compared to the customer who works as a field agent, even though they both work gig economy jobs. This is because the risk to the life of the coal miner is much higher than the risk to the field agent’s life.

  6. Family Medical History

    If there is a medical condition that runs in the family or a genetic illness that you may contract later on, the insurance provider will increase the premiums. Therefore, it is important to disclose your family’s medical history at the time of filling out the application form.

  7. Type of Life Insurance

    The type of life insurance you choose to purchase can increase or decrease your premium rates. For example, if you purchase an investment plan that has components of savings and protection, the premiums will be much higher compared to pure risk protection plans that are much more pocket-friendly.

  8. Required Sum Assured

    The life insurance premiums charged by the insurer depend on the sum assured requested by the policyholder, which means the premiums will increase with the sum assured. Also, if you add any other riders for additional coverage, the premiums will also increase.

  9. Premium Payment Term

    The longer the premium payment term, the lower the premium will be. For example, if you buy term plan of 1 Crore covering you till 60 years, the premiums payable in regular mode will be Rs. 550 per month for the entire policy term, whereas in limited premium payment mode, the premium will be Rs. 1248 per month, payable only for 10 policy years.

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How To Buy a Life Insurance Plan Online in India 2023?

Here is how you can buy a life insurance plan online in India 2023:

  • Step 1: Visit the life insurance plan page

  • Step 2: Enter your name, gender, contact information, and date of birth

  • Step 3: Fill in your smoking habits, educational qualifications, occupation type, and annual income

  • Step 4: Select the most suitable life insurance plan from the list of available plans and proceed to pay

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Wrapping it Up!

Before purchasing the most suitable life insurance plan, it is important to understand all the factors that affect life insurance premiums. This can help you secure a large sum assured and ensure the financial security of your loved ones at the most affordable premiums.


  • Q: What are the 9 factors used to determine the cost of life insurance premiums?

    Ans: The 9 factors used to determine the cost of life insurance are:
    • Age
    • Sum assured
    • Policy term
    • Type of life insurance
    • Family medical history
    • Pre-existing conditions
    • Lifestyle habits
    • Gender 
    • Type of occupation
  • Q: What are the 2 components of life insurance premium?

    Ans: The 2 components of life insurance premium are as follows:
    • One portion of the premium is used for the investment aspect of the life insurance policy. This amount will be invested in the market to create wealth for the policyholder’s future.
    • The remaining part of the premium is used for the insurance aspect, wherein the amount is charged for the insurance aspect of a life insurance policy.
  • Q: What is the meaning of premium in life insurance?

    Ans: Premium meaning in life insurance is the amount the policyholder needs to pay in exchange for receiving the benefits of the policy. These life insurance premiums can be paid in a single, limited, or regular policy term.
  • Q: When is the right time to buy life insurance?

    Ans: The right time to buy life insurance plans is as early as possible. This is because the earlier you buy, the lower the premiums will be. This way, you can secure a large life cover at affordable premiums.
  • Q: What is a life insurance premium calculator?

    Ans: A life insurance premium calculator is an online tool that helps you get an estimate of the potential premiums you would need to pay for the desired life cover. This can help you plan your finances, compare premiums, and select the suitable life cover.
  • Q: How does gender impact life insurance premiums?

    Ans: Gender impacts the premium rates as the premiums are lower for female customers in comparison to male customers. This is because women tend to live a longer life than men, which means they have a longer life expectancy.
  • Q: What is the process for life insurance premium receipt download?

    Ans: The process for life insurance premium receipt download is different for different insurers. However, the basic procedure is to visit the insurer’s official website and log into the customer portal. From there, you can click on the life insurance premium receipt download button and save the receipt for future use.
  • Q: What is the age limit for life insurance?

    Ans: The age limit to buy life insurance is 18 years to 65 years. People within this age range are eligible to buy life insurance and secure the financial future of their family in India.
  • Q: What is the need for a life insurance premium receipt download?

    Ans: The life insurance premium receipt download has the following benefits:
    • It can be useful to keep track of all the premiums paid
    • It can help at the time of filing tax returns as proof of active policy
    • Your nominee can use the premium receipt at the time of making a claim
  • How to calculate the term insurance premium online?

    Ans: You can easily calculate the term insurance premium online by using the term insurance premium calculator online tool
  • What are the benefits of term life insurance?

    Ans: Here are 4 common term insurance benefits:
    • Low premium rates
    • Tax Benefits
    • Death Benefit
    • Long term coverage
  • What is term life insurance?

    Ans: Let's understand what is term life insurance here. Term insurance offers financial protection for a certain period to the policyholder, thereby, offering a lump sum payout if the policyholder unfortunately passes away during the policy term.
  • What are the key features of a best term insurance plan in India?

    Ans: Below mentioned are the key features of a best term life insurance in India:
    • Affordable premium rates
    • Long-tenure life protection
    • Easy to understand and buy
    • Riders availability
    • Whole life protection
    • Tax benefits

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