What Are The Factors Affecting Life Insurance Policy Premiums In India?

Written by : Knowledge Centre Team

2020-05-13

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Whether you are an individual or a family, securing your finances must fall at the very top of your priority list. This is particularly true if you have any dependants relying on you as a financial provider. It is essential that in the event of your unfortunate demise, the financial concerns of your dependants, be they familial or professional, are looked after.

That is why it is recommended that every individual and family avail a life insurance policy that can help safeguard their futures and provide some much-needed peace of mind. However, one must consider that while a life insurance policy is a universal recommendation for all, the particulars of each policy differs from person to person.

There are various features that differentiate one insurance policy from another, including the benefits provided by that specific insurer. But in particular, the premium amounts that a person pays towards his or her life insurance policy is dependant on a number of crucial factors. If you too would be interested in knowing how your life insurance premiums are determined, here is a comprehensive list of these factors:

Age:

The primary factor influencing the life insurance premiums of a policyholder is his or her age. From the perspective of the insurer, a young individual has a higher chance of continuing the life insurance policy for years to come. He or she is also less likely to suffer from an age-related disease and pass away prematurely. This makes them less of a liability for the insurer and hence, more likely to be eligible for low premiums. Hence, as a general rule, it is preferable to avail a life insurance policy as early on in your career as possible to avail the lowest premiums possible for you.

Gender:

Another factor that determines the amount of your premiums is your gender. This factor is rooted in scientific and statistical evidence which states that women are likely to live an average of 5 years more than men [1]. This translates to women availing their policies for a longer tenure than men, and hence, as mentioned above, this means they can avail lower life insurance premiums.

Medical Records:

Life insurance policies typically come with an underwriting process that includes conducting a thorough medical exam of the policyholder. The findings of this medical exam shed light on the status of your physical health and raise flags about potential illnesses you might contract in the future. Therefore, these medical records and their results also play a key part in determining the exact premium amount you will pay for your life insurance.

Family History:

It is widely known that certain diseases are considered hereditary, which means that they have a tendency to run in the family. Other types of diseases might not be considered hereditary, but might have a higher chance of affecting members of a family due to common lifestyle choices. All of these risks are reflected in your family medical history, and also play a part in determining your life insurance premium amounts.

Tobacco Use:

An important factor that most people might not consider when thinking about life insurance premiums, is an individual’s smoking habits. According to research, people who smoke are more likely to contract various illnesses and have a higher mortality rate as well. Hence, the term insurance premiums for smokers reflect these risk factors and tend to be higher than for their non-smoker counterparts.

The Individual Policy:

Lastly but most importantly, a major factor in your life insurance premiums is the insurer from whom you opt to avail your policy in the first place. It is recommended to opt for an insurer that provides you extensive coverage at the most economical premium amounts.

This is made possible by Canara HSBC and the iSelect Smart360 Term Plan, which is one of the most reliable and affordable life insurance plans in the market. The benefits of this policy include a pure life coverage as well as various in-built benefits such as enhanced coverage with its child support, accidental death and accident & total disability benefits.

With the iSelect Smart360 Term Plan, you can also opt to secure your partner’s future by incorporating a Spouse Cover in your policy. Moreover, the iSelect Smart360 Term Plan by Canara HSBC comes with a customizable cover feature with which you can opt for level, increasing or decreasing coverage, as per your needs and goals.

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