• Age
The chief factor that affects the life insurance premium rate is your age. Younger people are healthier and less risky for the insurance company to cover since the probability of claims will be lesser. As you grow older, you become more susceptible to medical conditions. Even commonly prevalent diseases like diabetes, asthma, etc. can have a huge impact on your premiums. So, you should ideally buy life insurance when you are young.
• Gender
The next important factor is your gender. Women, on average, tend to live longer than men and hence, insurers charge them lower premiums. A report by the 2022 Economic Surveys says that women have a longer expectancy rate as compared to men. So, it can be inferred that a woman might end up paying premiums for a longer time than a man, leading to lower premiums.
• Lifestyle choices
Your lifestyle plays a big role in how much you pay for life insurance. Lifestylemeans how you spend your time and what you like to do, including your healthchoices, hobbies, and interests. These choices can affect how long you live. Forexample, if you enjoy risky activities like kayaking, surfing, etc, your lifeinsurance premiums could likely be higher. This is because such hobbies canbe dangerous, and insurance companies might see them as risky.
•Tobacco Use
"Smoking is injurious to health" is a health advisory that you can often see onscreens during ads, movies, and series. It is true, smoking is really bad for you.But did you know it can also impact how much you pay for life insurance?Using any form of tobacco is harmful, no matter how little you use. Insurancecompanies know that smoking and other tobacco use can lead to serioushealth problems over time. This is why they ask questions about tobacco usewhen you apply for insurance to understand the risks you might bring.Questions might include: Are you a smoker? How many cigarettes do yousmoke per day? When did you last use tobacco? And based on your answers,they will decide your premium. In essence, smokers typically pay more thannon-smokers.
• Medical History
Any insurance company will require you to go through a medical screeningbefore signing up for the policy. This test helps them in evaluating your profilefor any existing or future medical risks. Medical conditions can be hereditaryor an outcome of your lifestyle. If you are diagnosed with a pre-existing severemedical condition while buying the policy, then your premium rates will behigher than that of a healthy person - since you will be a risky individual tocover.
For example, Anisha and Amina apply for term insurance plans. Anisha hasdiabetes, whereas Amina doesn’t have any pre-existing conditions. So, thepremiums of Anisha’s policy will be higher
• Policy Duration
The policy tenure also has an influence on the premiums you pay. The longerthe duration, the longer the premium payment term. Short-term policies arecheaper than long-term policies
• Profession
Your profession also plays a key role in determining the cost of your lifeinsurance. If you are working in hazardous environments that can have aneffect on your health, it can increase your premium. Industries like mining,fisheries, chemical, oil and gas have been known to have adverse healtheffects. This is why insurers might calculate higher premiums if you work inthese professions
