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Changes in Term Insurance Premium - What Drives the Term Life Premiums Up or Down

Published On Oct 11, 2021

Since term life insurance is such an important part of your financial plan, you should try to keep the cost as low as possible while still ensuring that you are covered. Your term insurance prices are influenced by a number of things. Some of these criteria will relate to you personally, while others will apply to the entire group. The following article mentions some of the most important factors that influence the cost of your term insurance policy.

What Drives Term Insurance Premiums Up or Down?

Controllable and uncontrolled circumstances can both have an impact on policy premiums.

1. Factors Within Your Control

1. Health - The state of one's overall health, as well as the prevalence of diseases and disorders, can have a significant impact on premiums. People with health concerns, such as high blood pressure, diabetes, and heart disease, are at a higher risk of dying. As a result, term insurance premiums will rise. Many insurance companies also require clients to take a medical exam.

2. Lifestyle Habits - Term insurance premiums can rise as a result of bad habits like smoking and drinking too much alcohol. In general, insurers charge smokers twice as much in premiums as non-smokers. It's because these practises raise the danger of death.

3. Occupation - Specific activities, such as mining, fishing, firefighting, and deep sea diving, are riskier and more risky than others. As a result, life insurance premiums for policyholders in such occupations will rise.

4. Obesity - Obesity is the root cause of a number of health problems, including high blood pressure, diabetes, and other conditions. Therefore , obese people pay a higher rate than others. 

5. Online or Offline Mode -  A term plan can be purchased both online and offline. Because online premiums do not include intermediaries or additional agency fees, they are less expensive than offline rates.

6. Policy Duration and Value - The premium will be higher if the policy is for a longer period of time and the sum assured is bigger. Simply put, the longer term and higher value mean that the insurance bears more liability as you get older.

2. Factors Outside Your Control

1.Age - The younger you are, the cheaper your insurance costs will be. Term insurance premiums rise as you get older. The main explanation is that young people are less likely to become ill or die than older people.

2. Gender - Women, according to studies, have a greater life expectancy than men. As a result, women pay a lesser premium than men.

Take Away

Generally, term plans are the most cost-effective life insurance options for you and your family. They have become more of a necessity than a choice, given the mounting uncertainty. Therefore, an increase in life insurance premiums should not deter you from purchasing a term plan, which is still an affordable and flexible coverage.

Also read - How To Select The Best Term Insurance Plan For The Tough Times Of Life?

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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.

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