Life insurance is a sure way to ensure financial security for yourself and your family. However, the way we live and the lifestyle choices we make are important for determining the life insurance premium rates of our policy.
For example, people who incur a lot of risk in their lives tend to pay more life insurance premium. This is true for people with high-risk jobs, smoking habits, those with a thrill for adventure sports and so on. On the other hand, the insurance premium of someone who doesn’t tick any of the above boxes is much lower.
Apart from the obvious factors like the age and the medical history of a person, here are 5 lifestyle factors or choices that impact one’s life insurance premiums:
What are the 5 Lifestyle Factors that Affect Life Insurance Premium Rates?
A lot of factors can easily influence your life insurance premiums if they are seen as an additional risk by your insurance provider. Here are some of those:
- Smoking and Tobacco Usage: These habits are known to induce a string of health risks in a person’s life. Term plan premiums are affordable, and this is one of the main reasons why most policy buyers go for term plans.
- Excessive drinking: If you are purchasing a term life insurance policy, it is advisable to first check if your drinking habits (if any) are under control. When it comes to differentiating between a normal drinker and an alcoholic, insurance companies set up some criteria. People who drink alcohol occasionally may not be considered a risk by their insurers.
- High-risk professions: People with risky jobs, such as mining and construction, are often at direct and greater risk of fatal injuries at work. While purchasing a life insurance policy, the insurer should be aware of the policy buyer’s occupation so they can accordingly calculate the risk of the insured and determine their premiums. Having a high-risk job would also call for increasing the life insurance cover since any unfortunate event could leave one’s family vulnerable to financial stress.
- Poor driving record: Rash driving, and violating traffic rules mean that an insured person’s life is at risk. Even past records of having violated traffic rules will count against a person when they are purchasing a term plan or any life insurance policy. Driving records are an important aspect that an insurance provider will consider while calculating the premiums of a policyholder who puts not only others but also themselves in danger with their poor driving skills.
- Other lifestyle habits: Sedentary Lifestyle, is quite likely to make your insurer hike up your insurance premiums. The lack of physical activity leads to an increase in cholesterol levels and obesity, which are precursors to a host of other lifestyle diseases such as high blood pressure, heart ailments and so on.
What to consider while buying term insurance or a life insurance plan?
Apart from choosing a good life insurance provider to purchase your plan from, it is important to delve deeper into understanding which insurance policies are suitable for you.
Even something like the life insurance premium tax* rate can be one of the determining factors if someone wants to avail of tax* benefits on their insurance. However, this should not be the only reason for buying a policy as the main aim of insurance is to provide a protective financial cover for the insured and their family.
Additionally, a choice of life insurance plans is always favourable since it allows policy buyers to choose a plan that meets their needs. By simply settling down with an unsuitable plan, one can end up paying more premiums that cut into one’s daily expenses or even savings, which are suggestive of an inadequate insurance cover. Either way, such a policy becomes an issue for the policyholder.
Term insurance plans are popular because of their affordability. While life insurance providers do not deny insurance to people who carry high risk, they sell insurance to such individuals by increasing the premium amount to cover the high degree of risk.
As discussed above, certain lifestyle habits can lead to an increase in your premium payments. This is so that the claim settlement can be a hassle-free process, where the insurer can enable you or your family to get access to the sum assured of the policy.
When you buy a term plan from Tata AIA, you can choose a term insurance plan with a life insurance coverage that is best suited for your needs. By selecting a premium payment frequency of your choice, you can pay your Tata AIA Life Insurance premium as per your convenience and ensure a protective life cover for your family.
However, it is better to adopt certain best practices as part of your lifestyle that can help you keep your term life insurance premiums in check.