- Premium is the fixed amount you pay at certain intervals to your insurer to enjoy life insurance coverage and other benefits offered by your policy
- Premiums vary across policies and are lower for term plans as compared to savings and market-linked plans
- Age, lifestyle habits, occupation, and medical history of your family are some essential factors influencing your life insurance premium
Life insurance premiums vary across policy types, and individuals buying it. While pure term plans, which have no maturity benefits, have lower premiums, endowment plans and ULIPs command a higher premium because they also help you save and invest respectively.
However, premium for the same term plan may vary across policyholders. Your friend might have availed the same policy as you, but it can so happen that the two of you are paying different premiums. Let’s look at the various parameters that affect the premium of term plans:
Age - The older you get, the more expensive it gets
Age is one of the most important deciding factors of your term plan premium. Premium is directly proportional to your age. The younger you are, the lower is the premium, and vice-versa. Since the chances of health related ailments increases with age, so does the premium amount.
The table below highlights the fact:
| Your Age |
Policy Term |
Life Insurance Cover |
Annual * Premium |
| 25 |
30 years |
50 lakhs |
4,000 |
| 35 |
30 years |
50 lakhs |
6,700 |
*Disclaimer: For a non-smoker, male having no premedical condition, buying Exide Life Insurance Elite Term Plan (online mode). The premium mentioned is excluding GST and rounded off to the nearest hundred
Lifestyle Habits - pay lower premium for good habits
Your lifestyle habits too play an essential role in arriving at the premium. Healthy habits reward you with a lower premium. An unhealthy lifestyle encompassing smoking and drinking, increases risks to your health, thereby pushing up the premium.
It works on the simple premise that life insurance companies risk more on covering a person with unhealthy habits (thereby increasing mortality rate) than those staying away from tobacco and alcohol.
| Name of Term Plan |
Age of Insured |
Smoking Habits (Y/N) |
Sum Assured |
Policy Term |
Annual * Premium |
| Exide Life Elite Term Insurance Plan |
25 Years |
N |
₹ 50 lakhs |
30 Years |
₹ 4024 |
| Y |
₹ 50 lakhs |
30 Years |
₹ 5654 |
Disclaimer: For 25 year old male, with no pre-medical condition, buying Exide Life Elite Term Plan (Online Mode). The premium rates are exclusive of GST.
Occupation - More Risk, More Premium
The nature of your occupation has a say in the premium you pay. If your daily job involves indulging in activities that can prove fatal, the insurer covers more risk for you. Consequently, the premium is higher. Against popular perception, desk jobs are beginning to be seen as high-risk occupations because of the sedentary lifestyle they induce.
Medical History of your family
If you have a history of diseases in the family, including critical illnesses such as cancer, stroke or high cholesterol and blood sugar, the likelihood of you obtaining that disease increases. As a result, your premium too, increases.
You are required to disclose all your health-related facts while filling up the proposal form following which you might need to undergo a medical test. If the risks are high, your insurer might increase the premium. The sum assured may also be reduced. Non-disclosure of medical history might result in claim rejection.
Pay your premiums on time
To ensure you remain covered and your dependents receive the benefits your term life insurance policy, always pay premium on time. If you miss paying the premium during regular term period, make sure you do so during the grace period. Reviving a lapsed policy involves cost in the form of late fee payment. Moreover, during a re medical, if your health is found to have deteriorated, it may result in a hike in your premium payment.
