Why is term insurance quote different for every applicant? Is there anything you can do to enjoy the perks of low premium?
Term life insurance provides a financial advantage to the policy holder’s family in case of his or her untimely death. However, there are various factors that affect your term insurance quote and the premium you have to pay. The good news is there are some factors that you can control and improve upon to revamp the premium price you ultimately pay.
Let us take a look at the various factors that affect the Term insurance quote:
- Age: Young people are usually healthy, and thus buying Term insurance at an early age is usually more profitable as it opens the chance to get a low premium for a higher sum assured. So, the younger an applicant is, the lower will be the premium offered. For instance, a younger person of, say, age 25 will have to pay a lower premium for the same quote than someone of age 45. Additionally, the same low premium gets locked for the full policy term.
- Gender: Term insurance quotes also differ on the basis of gender. Various surveys conducted over the years have shown that women outlive men. Further, term insurance quotes considered for women are generally for two years less than the actual age by the insurer. Consequently, women generally have to pay a lower premium than men for the same coverage. For instance, if a male aged 30 years is charged a certain premium amount, the premium for a woman of the same age, i.e., 30 years, will be considerably less as she will be charged a premium for someone aged 28 years, not 30.
- Medical/Family History: Family and medical history is another parameter used to evaluate a term insurance proposal. Here, your age and the history of critical illness also matter; for instance, in case you have a family history of diabetes, the risk of you obtaining diabetes increases with age. So, the earlier you purchase the insurance the better, as the chances of getting a lower premium are high that way. Further, you can also add a critical rider to the term plan to make it more comprehensive.
- Smoking Habits: ‘Smoking is injurious to health’ is not a mere caption; it actually puts you at a higher risk of several ailments. So, if you are a non-smoker, it works in your favor, as non-smokers enjoy rebate in premium. Since non-smokers are generally healthier than someone who smokes, the premium price to be levied is lower than a smoker.
- Lifestyle: Lifestyle also plays a pivotal role in term insurance quotes. As a general rule, a person with a healthy lifestyle is a preferred risk by the insurer as compared to a person with any lifestyle ailments like hypertension, high cholesterol, diabetes, etc. Usually, extra premium is charged for such lifestyle ailments and is based on the insurer’s underwriting practice. The occupation also is a factor to consider; for instance, a person with managerial occupation is prone to less risk than a person who engages in activities like mining, mountain climbing or streetcar/ bike racing, as the chances of risk increases in such scenario.
To conclude, term insurance quote may differ from person to person; however, if you are aware of the above-mentioned factors and how they affect your proposal, you have a better chance at negotiating the best possible premium and coverage. For any clarification, get in touch with at 5nance.