Being human beings, we always tend to protect our family members or loved ones before us, whether it be physically, emotionally, socially, or financially. But we cannot predict what will be the situation in the future that requires our attention. Health, lifestyle, maintenance, education, marriage, debts, liabilities, etc are all specifically the concerns we uphold to contribute to in our future. But what if you are a member of a family who has responsibilities attached to every member of the family? But you met with an unfortunate incident that caused you an endangered threat to life.
In such conditions, owning a term life insurance can be a blessing in disguise. It can provide you and your family members with all the coverages that are mentioned above to manage all your responsibilities whether you are in this world or not. The policy can cover them financially providing them a support system in your absence, but the coinsurance you own may have a soaring high premium on a monthly basis. But you must know what are the factors that affect your premium payments in the longer run. Read this article to know what factors you can get affected by your premium budgets.
What are the factors that affect term insurance premiums?
Term insurance premium has its benefits, but upon which factors we can say the premium for term insurance is getting affected?
Let’s delve into these 6 factors that affect term insurance premiums:-
- Age:- Age can be a deciding factor for a term insurance policyholder, how effective will be their coverage, and the sum assured. At a young age, policyholders can enjoy broad coverage at affordable premium rates. But the scenario with senior citizens is they’re more prone to diseases so they get higher premiums to pay the insurance company.
- Health condition and medical examination:- To get term insurance, one needs to undergo a medical examination. This medical examination allows the insurer and the assured to produce a suitable term insurance according to the requirements of a policyholder. This factor is something that can provide you the information about any pre-existing condition or a medical condition. But this also affects the premium of a term life insurance to increase as the insured is likely to claim for a medical condition soon.
- Occupation:- Though it may not seem to be one of the causing factors in increasing premiums. But your occupation can be a decisive factor that may affect the term insurance premium, Suppose you’re in an occupation that involves life-threatening risks, the premium of your policy will be higher.
- Lifestyle:- There’s a phrase that says- smoking kills. And this is true in the case of a term life insurance plan. In every plan, there are some terms and conditions that are pre-set by the insurance providers themselves. Such that if you are a smoker or an alcohol consumer, then the premium of your term life insurance policy will be expected to be higher. The reason is that smoking or an alcohol addictive individual is more prone to get a critical disease related to cancer, trauma, depression, lung and liver disease, etc.
- Sum assured:- The premium of your term life insurance policy may also vary over the amount of the sum assured. If you select a term plan that has a higher sum assured, then you’ll need to pay the higher premiums, as it can provide you with broader coverage. Even though it is a matter of your choice according to your affordability, future needs, liabilities, or responsibilities, the sum assured will act accordingly. Also, the premium payment tenure is another decisive factor for the increase in your term insurance premium.
- Gender:– Gender is another factor that can affect your term insurance premium, whether you believe it or not. The premium for women policyholders would be lesser than for men policyholders. So if you go to buy a term life insurance policy, the selection of your gender can entertain a tailor-made plan scheme for you. This is because the insurance companies want women to continue their term life policies for a long span.
How Can You Reduce Your Term Insurance Premium?
However, term insurance premiums may be high or less, but if your premiums are high, then you should read these pointers to lower your premium amount.
- Buy the term life insurance at a very young age
- Choose a term insurance policy that has a longer policy tenure
- Opt for additional riders on your policy wisely, only what you require
- Compare multiple policies before you go to buy a term insurance plan
In this article, we shed light on how your term life insurance premium payments can be affected due to 6 of the major happenings. But these are just the shortcomings of a term insurance policy. However, it can be turned against and you can actually lower your premiums just by following a few defining steps that can really help you minimize your term life insurance premium on a monthly basis. For more information, reach out to our insurance advisors and get to know more.