Life insurance has become a necessity today, as it assures you that your family is financially protected even if you are no longer around. Various insurance companies offer numerous types of life insurance plans. Among the different forms of life insurance policies available in the market, a term insurance plan is quite a popular option because it offers the dual benefits of a high sum assured and an affordable premium.
Today, a term insurance plan is an indispensable investment instrument, primarily due to the ongoing Coronavirus (COVID-19) pandemic. It is necessary to provide financial protection to your family members, particularly when you are not there to take care of them. While purchasing an online term policy, one of the essential factors you should ascertain carefully is the premium. It is because multiple factors influence it. Here is a list of the most common aspects that can lead to a rise in the premium.
The insurers keep on increasing the term insurance age limit. Today, even a 60-year-old person can apply for a term insurance plan. The policyholder’s age plays a pivotal role in determining the premium of the term plan. The premium for older people is considerably high compared to younger people as the latter have a substantially low mortality rate. Usually, a young person has a healthy and fit body. As you grow old, you become more vulnerable to death.
- Risky profession
Many insurers consider certain occupations or jobs as riskier when compared to other types of professions. For instance, employment in mining and working as a scuba diver or a sky diving instructor are some professions which the insurer considers dangerous, as the chances of mortality are high. Therefore, the premium for employees working in these professions is costly.
- Smoking habits
While you fill the term policy application form, the insurer asks you whether you are a smoker or not. Many insurance companies require you to undertake a medical checkup. Your term insurance premium will be considerably high in such cases when compared to the premium of non-smokers. Smoking can cause numerous health problems like cancer, hypertension, and lung diseases. This habit can even slowly take your life.
- Medical history of self and family
The medical history of yourself and your family members is another factor that makes it difficult for you to find an affordable premium for your online term policy. The insurer may check your and your family’s health records to ascertain whether you have any existing medical condition or at a risk of getting any illness due to your genes.
The mortality rate in the case of women is low when compared to that of men. Therefore, the term insurance premium is low for women in comparison to men.
- Sum assured
Lastly, the sum assured can impact the premium of your online term policy. The sum assured is another essential factor that you need to ascertain before buying a policy. The sum assured should be adequate for the family to meet all the household expenses, medical expenses, and long-term financial aspirations even if you are no longer around. While buying a term plan, ascertain that your sum assured is at least ten times your annual income. The higher the sum assured, the more the premium will be. So, determine how much premium you can afford before buying the term plan.
Apart from a term plan, no other plans available in the market offer a high sum assured at a nominal premium. So, do not hamper the financial future of your loved ones and provide them with a much needed financial protection by purchasing the right term life insurance plan. When you know about the factors that can influence the term plan’s premium, evaluate them properly before you buy a policy based on your monetary requirements.