What are the Factors that Affect Term Insurance Premium Increase?

A term insurance plan is a crucial investment in one’s life if you aim for financial stability with the least possible expenses while at the same time making sure that you have coverage. There are various factors that affect your term insurance premium. It is possible that some of these factors may apply to you on an individual basis, while others can do so on larger groups.

Major factors that can affect the premium of your term insurance plan are as follows:

• Your Age

  Age is a significant factor when deciding the premium for your life insurance plan. When you are young the premium rates would be lower in comparison to an old person. This is because it is very unlikely for a young person to contract a life threatening illness or to die in their youth.

Must Read: How Are Term Life Insurance Premiums Calculated?

• Smoking

  Smoking is injurious to one’s health and puts a policyholder at a high risk to attain several diseases, therefore, if you are chain smoker, then it’s a sign of alert for the insurance providers. Generally, many smokers pay twice as much premium as a non-smoker, therefore affecting the premium rate to a very large extent.

• Gender

  Although, insurance providers are not against any form of gender inequality yet they are of the view that the life expectancy rate for different genders is quite different. According to the statistical findings and studies, a woman is said to live 5 years more as compared to the men. Thus, this disparity results in women paying less than what men generally pay towards a life insurance plan.

• Medical History

  In case, a policyholder has a medical history of severe diseases such as heart disease, cancer, or any such then it makes them vulnerable to get these illnesses from the hereditary perspective. Thus, resulting in an increase in the premium amount by a large extent.

• Profession

  Profession is also one of the important factors in deciding the amount of premium you pay. Any person, who is working in fisheries, oil and gas, mining industry or any other dangerous occupation,results in an increase in the amount of premium they pay for the insurance plan chosen by them.

• Insurance Plan

  The insurance plan itself affects the amount of premium you pay, the longer is the plan duration, the larger would be the benefit that one’s dependents would get at the time of demise, since you have been paying it for that time period. A short term insurance plan is more costly as compared to a long term insurance plan.

These are some of the factors that affect the amount of premium that you pay towards your life insurance plan.

Also Read: What to Do With Your Term Life Insurance at the End of Term?

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.