A life insurance plan is something that is inevitable in this day of age. The uncertainty of modern times makes life insurance an essential part of family planning.
In the life insurance market, there are a lot of options to choose from.
Whether you are a first-time policy buyer or an experienced customer in the business, a variety of
options make it easy for you to decide the best deal in the market.
One of the most important factors that determine the feasibility of insurance policies is the premium
that the customers have to bear.
The amount of premium paid varies from person to person, as it depends on a number of factors.
If you are having to pay for a higher premium amount as compared to some other policyholder, then
one or more of these factors must be the reason behind it.
When it comes to general life insurance, age plays an influential role in determining not only the premium amount, but the eligibility as well.
If you are over the age limit mentioned in the terms of the policy, you may not be eligible at all.
The rule of thumb here is that the higher you age, the higher premium you pay.
This is the reason why buying life insurance policies at a younger age is said to be a wiser move.
The reason behind this is simple and is nothing but maths.
If a person buys a policy young, then they will pay a lower premium for a longer time.
However, if a person buys the policy at an advanced age, then the number of premiums paid by them will not be that high.
Thus, the premium amount is increased to balance the equation.
Women enjoy a huge advantage when it comes to premiums for life insurance policies.
Numerous researches and studies have been conducted all over the world across various geographies, demographics, races and cultures, and all of them point to the conclusion that women tend to live longer than men.
On average, the difference between the life expectancy of men and women is about five to seven years.
This is the reason why it is wiser to have the woman of the family be the primary policyholder.
Lifestyle Habits And Choices:
Drinking and smoking come with a lot of disadvantages, and one of them on this long list is having to pay higher premiums for life insurances.
The link between smoking and throat cancer, lung cancer and heart diseases has been strongly established. The same is the case with liquor and liver problems.
The habits and choices of the policyholder are examined by the insurance companies before issuing policies.
Detection of these bad habits sparks an obvious red flag.
People with drinking and smoking concerns are at a higher risk of losing their lives, hence insurance companies charge very high premiums, and in some cases, deny issuing any policy whatsoever.
Insured Amount And Duration:
Any general life insurance company has a wide array of policies to choose from.
Customers can customize the amount of sum they want to insure, as well as the duration for how long they want the policy to be active.
In simple terms, if a policyholder wishes that the payout in the event of their demise be high, then they need to pay higher premiums.
As for the duration, a policy that insures the policyholder for ten years has a lower chance of covering for their demise than a policy of, say, thirty years.
Hence, the premium in case of a longer policy duration is, subsequently, higher.
Involvement Of Middlemen:
When people buy life insurance policies through an agent, the agent receives a small percentage of the business as their commission.
This commission amount is borne by the customer buying the policy, making the amount of premium go up significantly as compared to buying the same policy online from the website of the insurance company, or directly from the office of the insurance company.
When signing up for any insurance policy, customers have to declare several facts concerning their hobbies, occupation and travel plans.
In case a customer has adventure sports as their hobby, then their premium goes up. Adventure sports have a higher threat to life, which becomes a concern for the insurance company.
In the case of occupation, the riskier the job a person does, the higher their premium. For example, a simple shopkeeper will have lower premiums than a pilot.
Policyholders’ Medical Information:
Investigation into the medical history and traits of a policyholder is a standard procedure before issuing policies for any general life insurance company.
If it is found that the customer is obese, underweight, spend most of their day in a sedentary manner, and so on, then the insurance company is inclined to charge higher premiums.
Medical records that have far from ideal figures on them invite higher premiums automatically.
Pre-existing conditions compound the chances of being eligible for an insurance policy while hiking the premium amount.
If any ailments are found in the diagnostics and tests conducted by a third party, then the premium climbs up significantly.
The history of diseases in the family that are hereditary in nature like diabetes, heart ailments, cancer,
hypertension, etc. also result in the premium amount becoming high.
The Uncertainty Of Life And The Importance Of Having Life Insurance:
As the great Bard said, “all the world’s a stage, and all the men and women merely players”, no one
really knows when their act on the stage of life will be up.
In such an event, it will not only be emotionally hard for the family, but financially as well.
Having an insurance policy, despite the higher premium, is an assurance that the loved ones dependent
upon you will be stable for a significant period of time.
Premiums for life insurance are just like any other subscription plan, and in case of an untimely passing, they will mean more than that Netflix subscription you hold.