Life insurance is an important product that helps secure your loved ones’ future if something unfortunate happens to you. Therefore, this is an insurance plan that must be purchased with proper consideration. One of the most important things that you need to consider when choosing a life insurance plan is the affordability of the premiums in the long run. After all, stopping your coverage because you cannot afford the premiums any more will see your previous payments go to waste.
Now, you may wonder – what are the factors that influence your life insurance premium?
If that is the question you have in mind, this article is just for you! Read on to discover 5 important factors that have a significant impact on your life insurance premiums.
The gender of the applicant plays an important role in determining the life insurance premiums. Depending on your gender and the propensity of your gender succumbing to certain health risks, there may be differences noticed.
- Applicant’s age
Life insurance companies also consider the applicant’s age when calculating the premium of coverage. The younger you are, the lower your life insurance premiums will most likely be. While mishaps can happen to anyone, older people are naturally at a higher risk of falling critically or terminally ill; therefore, insurers charge them a higher premium. This is why it makes sense to buy life insurance coverage when you are younger.
- Existing medical conditions (if any)
When you apply for life insurance, the insurer may ask you to submit your health records. If you suffer from any pre-existing disease or medical condition, you will most probably pay higher premiums to be covered for existing medical conditions, or even face exclusions.
- Family medical history
Studies have proven that certain diseases – such as cancer – tend to run in families. If your family has a history of such health issues, you may have to pay a higher premium in life insurance.
- Habit of smoking
Smoking increases your risk of developing several diseases such as cancer, heart disease, and diabetes. If you are a smoker, your life insurance premium will likely be higher than what a non-smoker would pay for the same coverage. It, thus, would be advisable to quit this habit for the double benefit of better health and lower premiums.
A young, healthy individual may benefit from lower insurance premiums, as compared to someone older and face higher health risks. A life insurance payout can help your loved ones stay financially afloat when you pass away or if you suffer from terminal illness or total permanent disability. The coverage can prove helpful if you are the sole breadwinner in your home. There are two main types of life insurance plans – whole life insurance and term insurance. You may speak to a financial consultant to find out which type of coverage would suit your requirements and budget. Do get your insurance coverage as soon as you can for peace of mind.
Hope that this has been an informative read for you today. Take care.