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  • Saturday, May, 2024| Today's Market | Current Time: 07:50:12
  • When purchasing a life insurance policy in India, it is important to remember that health and age play crucial roles in deciding term insurance premiums. Term insurance, an important component of financial planning, provides a security blanket for your dependents in the case of your death during the policy’s term. Here’s how health and age have a significant influence on term insurance premiums –

    Age at entry

    The age at which you buy a term​ insurance policy is one of the factors that significantly affect the premium​ rates. Insurers usually offer lower premiums to younger applicants because​ the mortality risk is one of the lowest for younger ages. Younger individuals​ are less likely to die from natural causes or health problems during the​ coverage term. Hence, the risk for the insurer is lower, and the premium​ rates are beneficial. This also motivates people to obtain insurance early​ in life and to enjoy these lower rates throughout the policy duration.

    Health condition

    The health condition of an​ applicant is the next main factor that determines life insurance​ premiums. When applying for insurance, insurers usually ask for a medical​ examination to evaluate the health status of the applicant. Healthy​ people, who do not suffer from long-term or life-threatening illnesses, usually​ are charged lower premiums. In contrast, these conditions are identified​ as potential risk factors for premature death by the insurer. Therefore,​ insurers charge higher premiums to account for the higher probability of​ payouts.

    Family medical history

    A hereditary disease which runs in the family could also raise your insurance premiums. If it is found that serious sicknesses, such as heart problems, cancer, or diabetes, are common in your family, insurers might regard this as a substantial risk factor. The idea is that people who have a family history of such diseases are more likely to encounter these diseases themselves. Consequently, the insurers may raise the premiums in order to cover the additional risk.

    Smoking and lifestyle choices

    Lifestyle decisions have a substantial impact on term insurance​ premiums. Smoking and frequent alcohol drinking have been linked to a​ variety of health hazards, including an increased risk of cancer, heart​ disease, and other serious illnesses. Smokers and heavy drinkers are considered​ high-risk policyholders by insurers as their behaviours raise the chance of​ health issues and untimely mortality. As a result, smokers and regular alcohol​ drinkers often pay greater premiums than individuals who do not engage in​ these behaviours.

    Occupation and hobbies

    The nature of your job and interests might also​ influence your life insurance costs. Jobs and activities with more physical​ danger or the chance of death have higher premiums. High-risk vocations include​ mining, construction, and roles requiring the use of hazardous chemicals.​ Similarly, activities like skydiving, hiking, and racing raise the risk of​ deadly accidents. Insurers charge higher premiums for these plans to account​ for the greater chance of a claim arising from these harmful activities.

    Besides health and age, a number of additional factors impact term insurance premium prices in India. –


    A term life insurance premium is likely to be slightly lower for women than the one offered to men. This fact is mostly based on the statistical data, which shows that women live longer than men on average. Insurers use these statistics as a gauge for risk assessment, theorising that policies held by women are less likely to result in an early payout. Thus, the perceived lower risk is reflected in the lower premium costs for female policyholders.

    Policy term length

    The length of the policy term is probably the most important factor of the insurance premiums. In particular, policies with longer term lengths, say 30 years instead of 10 years, are associated with higher premiums. This is because, with the general ageing of people, the risk of health problems and death goes up. Insurers tend to take into account the increased likelihood of a claim being lodged during the extended term, which leads to higher costs for the longer-term policies.

    Coverage amount

    The sum insured, which is the amount that will be paid out to the beneficiaries in the event of the policyholder’s death, is also a factor that determines the premium. A higher coverage implies a higher financial risk for the insurer which is covered by raising premiums correspondingly. Essentially, the more substantial the sum assured, the more the insurer stands to lose in the event of a claim, thus the higher the cost to the policyholder.

    Payment Frequency

    The frequency with which premiums are paid can also affect the overall cost of the insurance. Typically, paying premiums annually rather than monthly or quarterly might result in lower total costs. This is because insurers often add service or administrative charges to more frequent payment plans to cover the extra processing required. Annual payments reduce the administrative burden on insurers and are thus incentivised with slightly lower costs.

    Marital status

    Some insurers use marital status when determining premiums. The underlying idea here is that married people engage in less hazardous behaviour and have a more stable lifestyle, which may translate to a decreased risk of premature mortality. Married policyholders may be seen to have a lesser risk profile, which might lead to lower premium rates.

    Educational level

    Education level may occasionally affect premium estimates. The notion is that people with higher levels of education are more likely to live healthier lifestyles. They may have improved access to healthcare and make more educated health and lifestyle choices, lowering their risk profile in the eyes of the insurer.

    Geographical location

    Living in areas prone to natural disasters or areas with inadequate healthcare facilities can lead to higher premiums. Insurers consider the environmental and healthcare risks associated with a policyholder’s location. High-risk areas pose a greater likelihood of claims arising from accidents, diseases, or other health issues, leading insurers to charge more to mitigate these risks.

    To summarise, while purchasing a term life insurance policy, it is critical to recognise that criteria such as age and health play significant roles in determining your insurance prices. However, numerous additional factors influence the cost, emphasising the importance for prospective purchasers to properly examine their unique demands.


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