Personal Factors Considered to Decide Life Insurance Premiums

Posted by amrina alshaikh on July 30th, 2018

We all know that several life insurance plans are available in the market offered by different insurance companies, and premiums for every plan is different. A question often comes to mind that how is the premium amount decided, especially considering personal factors? This article enlists some factors that are considered while determining the life insurance premium.

Age and Gender of the Person

When life insurance is considered, the age factor is directly proportional to the premium amount. As age increases, you are more exposed to several illnesses; thus life insurance premium also increases. Younger people have to pay lesser premiums because they are healthier than older ones. Also, it is often observed that women are more prone to health issues when compared to men, which results in lesser premiums.

Height and Weight

It is always checked that the person has maintained his body in terms of height and weight. Weighty people are more likely exposed to weight-related illnesses, which can further affect the entire body. Hence, life insurance premium depends on physical fitness.

Medical History

The medical history is a critical factor in the life insurance premium calculation. The intensity of the illnesses you have been suffering, if any, plays an important role in premium computation. If you are still undergoing the medical treatments, the premium amounts may go high. Similarly, the medical history of the family is also considered to be important, because some illnesses are hereditary. If anybody in your family has a particular disorder which is likely to be adopted by you, the premium amount may get increased.

Dependents

The total number of dependents on you is also essential while calculating the life insurance premium. When you compute the overall protection needed, simultaneously the premium amount increases.

Occupation

The riskier occupations are considered for high life insurance premiums, such as oil & gas industry labours, pilots etc. 

Credits

Though it is not directly related, it is also seen whether you have any outstanding loan, debts, mortgages, and so on.

Smoking and Drinking Habits

It affects a lot if you possess smoking and drinking habits or not. Heavy smokers and drinkers have higher premiums. The intensity is checked, and then the life insurance premium is decided by the underwriters.

Travelling Abroad

If you are a frequent traveller and often visit the places that are potentially prone to critical diseases such as HIV, the premiums calculated are high.

Risky Hobbies

High-risk hobbies in which your life is at risk are considered for higher premiums. The possibility of getting injured or any unfortunate event is high in such cases; thus the increase in life insurance premium is made.

The factors enlisted above are entirely personal aspects, apart from which, there are insurance company related factors and policy-related factors. To get the best plan at considerably low life insurance premiums, you need to do thorough research, and also consider the different influences enlisted above.