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18 Apr 2024, Edition - 3201, Thursday

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Health & Lifestyle

Here are 10 Things Affecting Your Life Insurance Premium Rates

Covai Post Network



Insurance plans are an add-on to investment because they help enjoy financial security in times of need. When an individual starts an investment at an early age, he can get safety to have at least some financial support for near and dear ones in the later stage of life. No one knows when the loved ones may need finance, and if the family is already insured by some insurance plan, they need not worry about this.

Different companies offer different types of life insurance plans. An individual can decide the most suitable plan depending upon the need and requirement. It is always better to choose the best plan after proper analysis of premiums and extra costs associated with a particular plan.

Factors Affecting Premium

Many wonders why they need to pay a different premium than others for a similar life insurance plan. There are various factors that can affect the premium to be paid for an insurance plan. As a result, the rates may vary, and some of the factors that can affect the premium rate are:

1.Age – Age is an important factor for deciding the premium of an insurance plan. At an early age, the premium for the insurance is low than for candidates who opt for life insurance at later ages. To know the premiums for different plans, one can ask for life insurance quotes from the insurer to know this better.

2.Gender – As per research, women are expected to live at least 5 years more than men, and this is the reason why the premium charged from females are less when compared to males.

3.Medical history – Often information related to past medical history is collected when an individual chooses to obtain life insurance. Suppose a candidate has a parental medical history of some critical illnesses. In that case, it is believed that he is more likely to get prone to such diseases as per heredity, and thus he needs to pay a higher premium than others.

4.Health record – The policyholder also has to provide information about his past health issues to obtain insurance. This helps the insurance company decide the probability of health issues the candidate can suffer, which helps them decide the premium.

5.Smoking – It is believed that smoking can lead to several health issues. While obtaining life insurance, the company often asks whether the candidate smoke or not. Often smoking can lead them to pay more than the non-smoking candidate.

6.Drinking – Alcohol is again injurious to health, and thus insurance companies often ask the candidate if he drinks or not. A drinker needs to pay more premiums for obtaining insurance. Before one could choose an insurance plan, one needs to know the life insurance definition first.

7.Tenure of the policy – The premium highly depends on the tenure of the policy chosen by an individual. Short-term policies can charge more. If a candidate chooses to pay a premium for larger tenure, the benefit is more at the end. The tenure of the policy also helps decide the final amount one will get after the accomplishment of the policy.

8.Lifestyle – The life insurance premium is high for those who are adventurous and risk-takers. Such people have a higher risk to their life and thus need to pay a higher amount of premium when compared to others. On the other hand, one who has a healthy routine may need to pay a smaller premium.

9.Obesity – Obesity is another crucial factor that can cause major health issues. Thus, while obtaining life insurance, the company often checks this factor. This helps decide the premium for the candidate.

10.Occupation – Occupation also affects the premium in a manner that may lead to severe health issues. Some professions like mining and aviation may involve greater risk of life, and thus they need to pay more than candidates in general professions. It is thus important to obtain life insurance quotes to know the actual premium.

Depending on the following factors, the premium of a particular insurance plan may vary. The insurance company obtains the following information to decide the final premium for the individual. The income tax department also has rules and regulations for charging premiums. Income tax rules can also be checked to know this.

While an individual choice for life insurance, the insurer collects all this information to calculate the total premium to be paid by the candidate for obtaining insurance. An individual must carefully check all this before choosing the best insurance.

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