Life insurance is a contract that ensures how much money your insurance provider will pay your beneficiaries when the insurance bearer dies in exchange for premium payments made by the insurance bearer.
Various insurance providers offer policies depending upon your case or application.
The primary purpose of life insurance is to provide help or benefit financially to the defendants of insurance bearers. People often buy life insurance policies to offer income lost due to the death of bread earners in the family.
While some people buy insurance policies to cover the losses due to health issues or other life-threatening situations, life insurance is not as easy as it sounds. Various clauses need to be taken care of before you finalize your insurance. But how do you know what insurance provider will charge you? Several factors impact your life insurance policies. How you live, how you eat, what goes around you. Insurance providers consider everything before you qualify for an insurance policy. These factors will decide how much you are going to pay. However, every insurance provider has different ways to consider these factors. How your insurance company takes these factors will vary your premium payments.
We have created a list of the top ten factors that have a significant impact on life insurance policies:
Age: Here’s no surprise, age is the most crucial factor considered in an insurance policy. A young individual has less medical risk than a senior citizen who has more chances of contracting life-threatening diseases. And insurance companies know a healthy and young person will pay more premium payments before, company signs a cheque for your family.
Smoking: Since Smokers are more likely to contract the disease, insurance companies charge high premiums from smokers to lighten the risk associated. Health insurance and smoking are never on the same page. Providing insurance to smokers, insurance companies have to bear the uncertainty of client health. Therefore, companies either don’t offer insurance to smokers or if they do, they charge a high cost. Most smokers end up paying twice the amount of nonsmokers.
Gender: You might feel surprised here, but gender plays a vital role in insurance premiums. Companies are not racist for genders, but according to statistical data and surveys, women are likely to live five years longer than men do. Hence, insurance companies provide more extended insurance policies for women than men.
Profession: Another critical factor that impacts your insurance policy is what type of field you work in. Insurance agencies check whether you work in high-risk areas or not. Professions like fisheries, oil and gas, fire, or any other dangerous field of work have high risks associated with them. Therefore, individuals from these professions end up paying high premium payments.
Medical history: One of the most vital factors that are considered for life insurance policies. Companies check health history as most of the premium payments depend on this factor if the insurance seeker has medical history such as cancer, heart disease, tuberculosis, or any other illness which might have been caused due to hereditary.
Such types of factors increase the cost of insurance premiums. Companies prefer such insurance seekers to charge extra.
Family medical history: In a life insurance policy, family health records are as vital as your medical history. Candidates with a medical family history of illness such as sugar are charged extra. Some diseases are hereditary, so if anyone from your family has such issues, it will increase your overall insurance premium cost.
Drinking habits: Needless to say, drinking is injurious to health in many ways. If you drink on special occasions, it doesn’t affect your insurance policy. Still, if you drink regularly, then you need to worry as insurance agencies might reject excessive and regular drinker’s applications.
Even if they give you, they are going to charge a high premium from you. Individuals with excessive drinking habits might contract life-threatening liver or kidney disease due to such risk; companies are more likely to reject life insurance policies.
Lifestyle: people seeking life insurance might be surprised to know how lifestyle impacts your premium payments. Your lifestyle choices or habits will decide how much you will pay for an insurance policy. You may have a safe profession, but risky hobbies, food choices, and activities create an impact on your health. For instance, you have an office job, but you often go for dangerous adventure trips like ice climbing or hazardous treks. Such activities have risks associated with them. The more risky activities you perform, the more it would cost you. Therefore, life insurance providers raise premium payments from such clients.
Driving records: yes, driving records are checked before you qualify for life insurance. If you have bad driving habits or you often get caught in accidents, then chances are the insurance company will reject your application. Poor driving skills have a high risk of accidents, and you never know what happens. Therefore, to mitigate the risk associated with insurance bearers, companies offer expensive life insurance premium policies.
Obesity: This might sound weird, but people with obesity have the risk of life-threatening illnesses such as high blood pressure, osteoarthritis, stroke, cancer, coronary heart disease, etc., associated with them. According to surveys and statistical data’s individuals with obesity, issues have high chances of a heart attack. Hence, insurance companies often either reject such applications or charge extra for people with obesity