Know The 8 Factors Why Life Insurance Premium Increases

Term insurance safeguards the family financially in case of an unfortunate demise of the insured. While term plans are important for the financial security of the family, one must also take into consideration the various factors that increase the term insurance costs.

1. Age : Higher the age of the insured, higher will be the premium that will have to be paid. This is because, with an increase in age, the possibility of insurance payout by the insurer increases. Therefore, it is advisable to take a policy at a younger age.
2. Gender : This is the second major determinant of the premium amount. It has been concluded that women have a higher life expectancy as compared to men. This implies that women are likely to pay the premium for a longer period. Thus, men are likely to pay higher term insurance costs.
3. Leisure pursuits : When the insured is involved in dangerous leisure activities, then he/she will have to pay higher premiums because such pursuits increase the insurer’s chances of paying out insurance to the family.
4. Personal medical records : The insured is required to submit personal medical records to the insurance company. Any records indicating chronic illnesses or future possibilities of any health problems will result in a higher premium amount. Also, if an insured suffers from obesity, a higher premium will have to be paid since that increases the chances of serious health concerns.
5. Genetic illnesses : Another factor is the genetic diseases that run in the family of the insured. A family history of illnesses that are likely to be hereditary like cancer, heart attack, etc., result in elevated premium cost.
6. Smoking and drinking habits : When an insured smokes or consumes alcohol regularly, the premium for insurance automatically increases. The obvious reason is that both these activities are known to cause several health problems. Smoking, in particular, leads to up to twice the premium amount.
7. Career : The level of danger involved in one’s occupation also determines the premium. Individuals working in high-risk industries like mining, oil and, gas, logging, etc., will have to bear higher term insurance costs. An airline pilot also comes under a high-risk profession.
8. Policy : The specifications of the policy chosen also affect the premium amount. Larger the insurance cover, higher will be the premium amount. Also, long-term policies are costlier than short-term policies.

The above factors would allow you to control the premium that you would need to pay towards the life insurance policy . Also having a life insurance policy at the early stage of would attract low premiums toward the insurance plans.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.