Several factors influence the premium amounts of life insurance policies. Understanding these can help you make informed decisions when choosing a policy:
Age: The younger you are when purchasing a policy, the lower your premiums, as age directly impacts life expectancy.
Health condition: Individuals with good health typically receive lower premiums. Pre-existing medical conditions or poor health can increase premium costs.
Lifestyle habits: Risky habits like smoking or excessive drinking can lead to higher premiums, as they are linked to shorter life expectancy.
Coverage amount: The higher the sum assured, the higher the premium. A larger coverage amount offers greater financial protection, but at a higher cost.
Policy term: Longer-term policies often come with higher premiums since they cover a more extended period of time.
Occupation: High-risk occupations, such as mining or aviation, can result in higher premiums due to the increased likelihood of death or injury.
Gender: Statistically, women tend to have longer life expectancies than men, and thus may receive slightly lower premiums.
Policy type: Premiums vary based on the type of life insurance (term, whole, or unit-linked). Term life insurance generally has lower premiums compared to whole life policies.