5 MinsJune 1, 2022
Raju Sharma, 25, thought his parents were nagging him about getting an insurance policy immediately after starting his first job. When he finally visited a financial advisor to understand insurance ins and outs, Raju was surprised to realise that his parents were right. The advisor gave him a detailed explanation of why it was beneficial to buy insurance early, the main reason being that it would save him from increasing insurance premiums.
A life insurance premium is a payment that the policyholder makes to the insurance company in exchange for the protection of their life. In other words, a premium is what you pay to ensure that your family or loved ones have a safety net in the form of adequate monetary support in your absence. Factors such as the sum assured by the policyholder, lifestyle, and health conditions of the policyholder affect the premium amount. The insurance premium can be paid monthly, annually, or quarterly based on the life insurance policy chosen. Below are some factors that can save Raju from an increased life insurance premium:
Age: To keep your insurance premium low, it is advisable to get insured at a younger age. People of lower ages tend to have lower health risks or life-threatening illnesses. They, therefore, have lower premiums in comparison to older individuals. You can calculate your estimated premium based on your age with the help of a life insurance calculator.
Healthy Lifestyle: Life insurance companies also consider the policyholder’s lifestyle while calculating life insurance premiums. To have a lower insurance premium, you should adopt a healthy lifestyle that includes no tobacco and less/no alcohol consumption, regular exercise, and staying away from high-risk activities.
[Also Read: Benefits of buying a life insurance plan online]
Body Mass Index: Insurance companies also consider body mass index while calculating premiums. Having a lower body mass index and a clean bill of health on a thorough medical examination will help keep your life insurance premium lower. Therefore, it is essential to stay healthy to avoid serious medical ailments that can affect the premium amount.
Medical History: Another factor that affects the premium amount is your medical history. Before calculating the premium, insurance companies ask for the whole family’s medical history. Individuals who have more cases of life-threatening diseases like cancer or heart conditions among their family members are more likely to have higher premiums.
Policy Chosen: The sum of the life insurance policy and the tenure of the policy you choose also affect the premium you pay. Policies for higher sums or those with lower tenures usually have higher premiums that must be paid. Therefore, these are some factors that must also be considered while using the life insurance calculator.
Axis Bank has tie-ups with multiple life insurance companies – Max Life, Life Insurance Corporation of India, and Bajaj Allianz Life. Visit us to check out their plans.
Disclaimer: The Source, a Mumbai-based content creation and curation firm has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision. Names mentioned in this article are fictitious in nature and only for explanatory purposes.