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Factors That Affect Term Insurance Premium

You do not know what the future holds, as life is full of uncertainties and ambiguities. Therefore, it is advisable to invest in a financial instrument that can secure your family's monetary well-being, especially when you are not around.


Term insurance is an ideal option, as it offers high cover at an affordable premium.It ensures convenience when it comes to protecting the financial stability of your loved ones. Therefore, you must invest in one of the best term insurance plans in India. Although a term plan comes at an economical premium, various factors impact it. Some of these aspects are within your control while others are uncontrollable. Let us take a look at these to give you a clear idea.


Controllable factors


l  Lifestyle habits


The term insurance premium is high for people who smoke and consume alcohol excessively.This is because the risk of demise is significantly higher in such cases. The premiumfor these policyholders is almost double as compared to non-smokers.  


l  Profession 


The occupation of the policyholder also affects the premium of term policies. The risk of mortality is high for people working in mining industries or those who work as fire-fighters and fishers. Therefore, such policyholders end up paying a greater premium as compared to people from other walks of life.


l  Medical history 


Insurers take the applicants' medical history, and they may even have to undergo a medical test. The health of the person plays a significant role in influencing the term insurance premium. For instance, if you have high blood pressure, diabetes, or cardiovascular problems, the insurer’s risk increases and they charge a higher premium.


l  Obesity 


Obesity is one of the reasons that deteriorates the overall health of a person.It isthe root cause of health issues like cardiovascular problems, diabetes, breathlessness, and high blood pressure. Therefore, this condition influences the premium of a term plan.


l  Tenure and sum assured


The duration of the plan and the sum assured have a significant role to play. The premium is high if your policy's period is longer. Moreover, it willrise if you invest in a term plan with a higher sum assured. With a longer duration and higher coverage, the insurer’s responsibility increases due to which they end up charging a higher premium.


l  Method of purchase


You can buy a term plan via two modes, online and offline. The premium of the policy purchased online is significantly lower when compared to the traditional mode. While buying the term plan online, you are directly dealing with the insurer. On the other hand, in an offline purchase, the intermediaries' extra charges can affect the cost of the premium.


These are all the controllable factors that can influence the term insurance premium, now let us talk about some of the uncontrollable factors.


Uncontrollable factors


l  Age 


The premium of the policy increases with age. The premium ischeaper at a younger age, as the chances of being prone to chronic diseases are lesser during this phase of life, and the risk of mortality is low compared to older people.


l  Gender


When compared to the premium of men and women, the cost is higher for males.This is because generally, the life expectancy of women is higher in comparison to men.


With the growing concerns of the COVID-19 outburst and a constant increase in the death rate, you must safeguard the financial future of your loved ones by investing in term life insurance at the earliest. Due to the ongoing pandemic, the premiums are expected to rise considerably.So, buy a term plan now to secure a high cover at a cost-effective rate.

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