How Family History Affects Term Life Insurance Rates?

Buying a term life insurance policy is one of the best ways to get financial protection against the uncertainties of life. As the name suggests, a term policy provides protection for a specific period. In the event of the policyholder's unfortunate demise during the policy term, it provides a lump sum payout to the nominee.A term life insurance , which is also commonly referred to as a pure protection plan, is known to have the most affordable premium, among other life insurance plans. While most policy buyers would know that the insurance companies determine premiums based on factors like gender, profession, age, health status, lifestyle habits, etc., not many know that the family health history also plays a pivotal role.Typically, the underwriter considers your family's medical history before issuing the policy. If any of your family members have previously suffered from a critical illness, the insurer will consider it a major factor while determining the premium. The underwriters generally perceive that the policy buyers with a family history of critical illness as high-risk buyers.And, in such cases, the insurer may provide you a term life insurance cover at a higher premium to cover the risk of such illness.

• Certain diseases are known to be genetic, which means they can be passed onto from one generation to another. The insurance company will consider this as a major risk while providing your t erm life insurance cover.
• Suppose the family members passed away at a young age due to critical illnesses such as cancer or heart attack. In that case, the insurer will consider you a high-risk policy buyer and therefore charge a higher premium.

Some of the popular diseases that are considered as adverse family history:

• Diabetes
• Kidney failure
• Lung disease
• Heart disease
• Cancer

Is it okay not to mention family health details in the insurance application?Many insurance buyers tend to skip mentioning the family health information in the policy application to get a cover at a lower price. Such practices are unethical, but it can also have serious repercussions in the long-run.Remember, the insurance companies do a thorough background check of the policy's details, and if they find something suspicious, your policy application will be rejected. Also, if you hide any information and the insurance company finds out about it during the claim settlement, they may reject the sum assured on the grounds of non-compliance or breach of insurance terms.This can cause immense financial hardship for your family. Hence, it is advisable not to hide any family health-related information in the application form. Final Word When it comes to buying term life insurance policy, a family medical history plays a vital role in the premium you pay and whether you get the coverage or not. To get life insurance cover at an affordable rate, it is paramount that you maintain a healthy lifestyle.Lastly, before buying a policy, you must compare the plans from different insurers online and choose the one with an affordable premium and other terms and conditions favourable to you.

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.