You could be surprised why some people pay lesser premium than others for the life insurance policy from same company. In this article, we will tell you what are the factors affecting life insurance premium.
Life insurance, in reality renders monetary safety in lieu of determined premium. The amount of premium for your life insurance that you will have to pay will depend on the kind of policy – protection program or investment arrangement. The premium that you pay for protection program is less than the investment plan as it provides nil benefit on maturity. Nevertheless there are a small number of components which influence the premium of your life insurance.
Major Factors Affecting Life Insurance Premium
Following two factors are the major ones that affect the amount of life insurance that you have to pay for your policy.
Age is considered a major factor when it comes to paying premium. The cover takes out fatality rate which enhances with age. The more is your age the more will be your premium payable. When conveying life insurance values, company statisticians compute premiums established on age. The premium on life insurance diminishes as the policy bearer grows older. This, on the other hand, is only accurate if the policy owner has been under insurance coverage for a substantial span of time.
This is yet another major factor on which the premium for your life insurance will depend. In case a policy owner has fought with disease or sickness during the past, they might obtain higher premiums for their life assurance policies than for healthy policy bearers. The insurance authorities consider medical record as a risk, particularly if it jeopardizes life of the assured while covered in their policy. The similar kind of approach will apply in case a policy holder’s family also has a record of sickness.
Some Other Factors
Other components that frequently impact your life insurance cost include:
Gender of an individual also affects the premium. As the life span of a woman is longer than man, life assurance payment for women is slightly lesser.
Premium also reckons on if a person is a smoker or not. Premium for non-smoker is less since life expectation is more for them. Apart from this if a person wants to take up a life assurance policy but is engaged in risky activities, and then he/she will have to pay higher payment of premiums than others. Activities like taking recreational drugs or alcohol also calls in for higher premium.
Some professions like mining, fire fighting draw in higher premium when equated to white collar tasks.