Term Insurance Premium – A Key Factor To Finding The Best Coverage

Term insurance has become a vital part of modern-day life. When you compare insurance plans, you will find that term insurance is the most affordable of them all. However, it is important to choose a term insurance premium that is as low as possible without compromising on life insurance coverage. 

Here are the different factors that affect your term insurance premium and coverage:

A. Your age:

This is perhaps the most crucial factor of them all. Insurers categorize the general population according to their age group and rates of mortality. The rate of mortality will determine the premium amount that is applied to your coverage. The older you are, the higher your premium amount will be. To make the most of your coverage, it is advisable to buy term insurance as early as possible to enjoy lower premiums.

B. Your residential region:

Regional rates may vary which will impact the overall term insurance premium. For example, if your residential region is in a flood-prone or earthquake-prone area, then your insurance premium is likely to be higher. When you compare insurance plans, look for one that offers the best affordable premiums for your region.

C. Your gender:

In general, it is considered that women have longer life spans than men. Due to this fact, a woman’s term insurance premium amount will likely be lower than a man even if they are of a similar age and share other similar factors.

D. Your occupation: 

Your occupation can have a major impact on your lifestyle and health. Some occupations are more physically taxing than others. Or your occupation could put you at a higher risk of danger than other occupations. Insurance providers categorize occupations into three groups:

  1. Category 1 includes specialized occupations such as a general surgeon
  2. Category 2 includes semi-skilled occupations that do not involve physical labour. Most corporate, aka desk jobs, fall into this category. These occupations have the least risk and so, typically enjoy the lowest premiums.
  3. Category 3 includes unskilled labour-intensive occupations in industries such as manufacturing or mining.

E. Health and lifestyle:

If you want to enjoy lower premiums, then it may be time to give up or reduce habits such as drinking alcohol and smoking. These habits often impact your health and thus, to mitigate this risk, insurance providers increase the premiums for smokers and drinkers. A pre-existing health condition or a health condition that runs in your family such as diabetes will also result in higher premiums.


F. Additional riders:

Riders are an additional benefit that can be availed on the payment of added premiums. For example, if you work in a high-risk occupation, you can avail of an Accidental death benefit rider or an accidental disability benefit rider. These riders will ensure that you and your family are taken care of in case of any major accident.

In conclusion

Keep the above factors in mind when you compare insurance plans. Read the fine print and look for one that offers you the best term insurance premium along with the best coverage.

Oct 18, 2021
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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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