These Factors Affect Your Term Insurance Premium Amount
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Are you looking forward to getting a term insurance plan issued? Have you been calculating premium amounts for various term insurance policies to find out the best one? If so, know that a term insurance policy premium gets affected by a couple of factors. To put this into simple words, term insurance premiums are variable. Moreover, they depend on various factors that are specific and personal to each buyer. So, before you reach a final term insurance policy decision, it would be significant for you to have a look at the policy premium from a different perspective.
Important Factors that Affect Term Insurance Premium
Below mentioned are a few key factors that may cause your term insurance premium to go up or down based on:
1. Age
Age plays a significant role in deciding how much premiums the policyholder will have to pay. Keep in mind that the older the policy buyer is, the higher their term insurance premium will be. It is one of the key reasons why individuals are advised to start a term insurance investment early in life. It is because the cost of premiums is quite less if a policyholder is young. Furthermore, they also receive extensive benefits.
2. Gender
One of the prime factors that influence premiums is gender. In most cases, women pay higher premiums as compared to men since they require medical attention more often due to multiple health conditions. Many insurance companies provide term insurance policies to women at discounted premium rates.
3. Medical History
The medical history of a policyholder is massive in deciding the term insurance premium they will have to pay. It must be noted that if the buyer of the term policy has a family history of specific diseases, suffers from any sort of health issue, or works in a profession that is quite risky, then their premium will be higher than usual. It is because the liability increases in case of any health risks.
4. Lifestyle Habits
Term insurance plan premiums are also affected by lifestyle habits. Keep in mind that if you smoke (whether rare or usual) or drink alcohol (in excess), your lifestyle habit can result in the increased cost of your premiums. It is important for you to understand that smoking has a greater impact on premiums, however, alcohol drinking in limit does not come across as a threat to the insurance companies.
5. Tenure
The premium price of a term insurance plan is also determined by the “term” of the policy. The longer the term, the higher premium is expected to be.
Premium is one of the key aspects to look for when buying a term insurance plan. Remember, you will have to consider claim settlement ratio, financial goals, family history and a lot more before making the actual term insurance purchase decision that is worthwhile.
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Why Should You Consider Buying Term Insurance for Family
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
