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What Are The Factors Which Influence Life Insurance Premium ?

Published On Jun 02, 2021

Life insurance is a wonderful way to protect your loved ones financially. Just within a number of years with a marginally low premium, it helps you generate significant corpus. Yet, considering its popularity, many of us don't know how many factors – some within our power – influence the life insurance premium we pay.Some of these are beyond the influence, while some are factors influenced by simple lifestyle choices.

List of Factors Affecting Life Insurance Premium

There are various factors that affect your life insurance premium, the top and most important factors are listed below:

1. Age

The younger you're the cheaper your premium would be, which is why insurance experts always consider buying a policy when you're young. However, you're never too old to buy life insurance and there are a range of affordable solutions available to guarantee that you and your family have the coverage you need.

2. Gender

Insurance providers are not opposed to gender equality, but agree that there is a different life span for different genders. According to research and scientific reports, women are predicted to live at least 5 years longer than men. Consequently, it changes the price they pay, allowing them to pay the premium for a longer period of time but at a cheaper cost, which is a plus for women.

3. Family Medical History

There's not much that can be done for the gene pool we come from. When a policyholder has a medical history of severe illnesses such as cancer, heart disease, or some other type of disorder, that makes them vulnerable from a hereditary point of view. Which raises the individual's premium by a greater margin.

4. Current Medical Status

As a policyholder, you would still need to have your own medical history. This data will ensure that you do not have any chronic illnesses or future health conditions, and keep your premium in line instead of making a difference.

5. Unhealthy Habits

People might have some unhealthy lifestyles of living and they might be obese or overweight or underweight which might increase their chances of being prone to sickness. Drinking alcohol or smoking is detrimental to health in more than one way. If you, as a policyholder, are a big consumer of alcohol or tobacco, this can impact your premium at higher insurance rates. Insurance providers shall ensure that the applicant is asked whether they are smokers or drinkers.

6. Occupation

Your occupation also plays an important part in the premium you end up receiving, any policyholder working in the mines, oil and gas, fisheries or any other risky profession raises the premium amount you pay for the policy you plan to follow.

7. Policy Coverage

The longer the policy term and the larger the death benefit, the more you will pay for it. Simply put, this is because the probability that you will die during the insurance term is greater for the Term 30 policy (a policy that protects you for 30 years) than for the policy that covers you for 10 years (a Term 10 policy.)In addition, the higher the death benefit (i.e. the money that will be compensated to the beneficiary), the more you will be paying for compensation. Long term premiums are more costly than short term plans, and full or lifetime life insurance is usually more expensive than term life insurance.


All of the above factors have a different impact on the life insurance premium. You should always do a comparison review of the various life insurance plans provided by different companies before picking any one policy that fits your needs. Before opting for a scheme, one can go over all the relevant terms and conditions so that you can pick the best possible policy that protects you and your loved ones with maximum benefit.

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