There Are Seven Reasons Why You Have To Pay A Higher Life Insurance Premium Than Others
Those who have just begun looking for life insurance plans may be curious about how much each policy will cost them. It can be quite challenging to understand sometimes why you have to pay a higher rate than others for life insurance.
Here are the factors that can result in a higher life insurance premium for you:
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Higher Age
You pay more for life insurance as you get older. You will pay lower premiums for the duration of your policy if you buy it at a younger age than if you get it at an older age. Why? Because of aging, there is a higher chance that your health might decline, and the insured event may occur earlier.
2. Gender
Life insurance policy tends to cost less for women. Even though they live longer than men, it is not because their lives are favored more. According to several studies, women live 5 to 7 years longer than men.
3. You smoke as part of your lifestyle
Statistics show that smokers live shorter lives and hence pay higher life insurance premiums, as smoking is known to cause illnesses like lung and throat cancer. The insurance industry sees smokers as a high-risk group for various health conditions.
4. Longer policy term or higher sum assured
It is more expensive to purchase a policy with a large sum assured and a long term. It is because the risk of your demise is greater if you have a 30-year policy than a 10-year policy. Furthermore, if you pay a higher sum assured to your nominees, you will be charged a higher premium.
5. It's Not Online, It's Through A Distribution Agent
As competition grows, insurance companies offer cheaper premiums online to create their space. On average, online life insurance plans are 30-40% cheaper than offline plans. The purchase occurs directly between the insurer and the customer, which reduces paperwork and agent commissions. Therefore, if you buy life insurance from an agent rather than online, expect to pay higher
6. Counteroffer Based on Proposal Declarations
Hobby: An extreme hobby, such as climbing treacherous mountains or racing cars, could cost you a lot more to insure. Because of this, insurance policies tend to be more expensive when you engage in activities.
Occupation: Occupational risks vary by occupation. Pilots, soldiers, fishermen, gas industry workers, and mine workers can expect to earn more than those who work in safer conditions, such as teachers, office workers, or shop workers.
Country of Travel: If you've traveled to hazardous places, an insurance company isn't interested in your last family vacation to Switzerland. For example, if you have visited a country with a high prevalence of tropical diseases or HIV. It may also increase your premium if you frequently travel abroad for business.
7. The Company counteroffers based on its medical investigation
Physically unfit: An overweight, sedentary, or medically unsound individual will pay a higher insurance premium than someone who is active and weighs a healthy amount.
You do not have an adequate medical history: Medical conditions can also result in higher life insurance premiums. In general, people with severe medical conditions are more expensive to insure since they are more likely to need more tests, diagnostics, medication, treatment, and other expenses since they are in poor health.
Hereditary Illnesses Occur in Your Family: Even if you remain in good health, your family history may include diabetes, cancer, heart disease, and hypertension. The insurance company sees this as an increased risk because you may inherit the same medical conditions.