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