Whether you live with your family or by yourself, making sure you have enough money should be your top priority. This is especially true if you have kids or other people who depend on you for money. In the event that you face an unfortunate event, the financial needs of those who rely on you can then be taken care of.
That’s why every person and family should get a life insurance policy to protect their future and give them some much-needed peace of mind. But it’s important to remember that while everyone should have life insurance, each policy’s details differ from person to person.
Many things make life insurance policies differ from each other, such as the benefits that a particular insurer offers. But, in general, the amount of the premium that a person pays for life insurance, depends on several important things. If you would also like to know how your life insurance premiums are set, here are 6 factors that affect your policy’s premium:
- Age: A person’s age is the most important thing that affects their insurance premiums. From the insurance company’s point of view, a young person is more likely to keep their insurance policy for many years. They are also less likely to suffer from a disease that comes with getting old and passing away too soon. This makes them less of a risk for the insurance company, and therefore, they can get lower premiums. So, as a general rule, getting an insurance policy as soon as possible in your career is recommended in order to get the lowest premiums.
- Gender: Your gender affects how much your premiums will be. This is because science and statistics show that women are more likely to live five years longer than men on average. Therefore, usually, their life insurance premiums are lower.
- Medical Records: As part of the underwriting process for most life insurance policies, the policyholder is given a thorough medical exam. The results of this medical exam show how healthy your body is and raise red flags about possible diseases you could get in the future. So, these medical records and their results are also a big part of figuring out how much your premium will be. If you are completely healthy, then your premium might be considerably lower than a person with a history of illness.
- Family History: It is a commonly known fact that some diseases are hereditary, which means they tend to run in families. Other ailments might not be considered genetic. Yet, they might be more likely to affect members of the same family if they all live the same way. All of these risks show up in your family’s medical history. Hence, if there is a history of illness or a high chance of getting sick, it affects how much you pay for life insurance.
- Tobacco Use: A person’s smoking habits are a crucial factor that most people might not consider when considering life insurance premiums. Researchers have found that people who smoke a lot have a higher risk of falling sick and a higher mortality rate. So, the term insurance premiums for smokers tend to be higher than those for people who don’t smoke, because of these risk factors.
- The Respective Policy: The insurer you choose to get your policy from impacts the value of your premiums. Selecting an insurance company that gives you the most coverage for the least amount of money is best.
A little research can go a long way in helping you choose the right one for you. You can always use a life insurance premium calculator to calculate the premium you will get. The life insurance premium calculator considers all the factors given above and more, for every life goal, before giving you a number. Most policies have many benefits, like life coverage and built-in benefits like child support, accidental demise, and accident and total disability benefits. Some plans also include a Spouse Cover to protect your partner’s future. Payment of premium on life insurance policies usually offers certain tax benefits. However, these vary based on if you’ve opted for the new or the old tax regime. There are many reliable and affordable life insurance plans in the market. Sometimes you can choose your level and increase or decrease coverage depending on your needs and goals.
