The Impact of Lifestyle Choices on Life Insurance Premiums

Investing in life Insurance policies is one of the best decisions you can make to secure your family’s financial future. It will create a financial safety net for your loved ones in exchange for predetermined premium payments. While all life insurance plans are designed for the same purpose, different policyholders pay different premiums to receive similar benefits or even the same life insurance coverage. Why does this happen?

This difference in premium rates is because of the policyholder’s age, health, and likely also lifestyle, habits, and pre-existing health conditions or risks. It can be surprising to most, but what you eat, how you live, the risks you take, and other lifestyle choices have some bearing or influence on your insurance premiums. This blog highlights major lifestyle factors affecting life insurance premiums.

Understanding Life Insurance Premiums

A life insurance premium is a predetermined one-time or consistent payment a policyholder makes to maintain the validity of a life insurance policy. Paying timely premiums ensures your family receives the policy benefits in the unfortunate event of your death.

The premium concept appears straightforward, but insurers assess multiple factors to determine policy premiums for different individuals. While there are numerous factors affecting life insurance premiums, the following are the most prominent.

Age 

Older adults and seniors generally pay higher premiums than young individuals because the risk of death increases with age. Insurance providers levy higher premiums to cover this increased risk. Hence, life insurance planning should start at a young age.

Gender

Insurance companies use statistical models to estimate how long an individual with a specific profile will live, influencing the premium rates. Since Indian female’s average life expectancy surpasses that of Indian males by 2.5%, women pay lower premiums than men.

Lifestyle Choices

You may be subject to higher risk if you work in risky occupations like mining, construction, etc., or frequently engage in adventurous activities like scuba diving, paragliding, etc. If people with this risk profile buy protection plans and child plans, they’ll naturally pay higher premiums than those with a safer occupation and less adventurous lifestyle. For greater understanding, we have covered the major lifestyle choices that impact insurance premiums in a later section. 

Family Medical History

Family medical history gives insight into hereditary diseases or health conditions that may influence the policyholder’s life expectancy. You’ll be charged higher premiums if your family has a medical history of critical illness or diseases like diabetes, cancer, heart disease, etc. You can explore life insurance FAQs to gain more insights about the critical illnesses or diseases affecting insurance premiums.

Pre-Existing Conditions

All insurance companies count pre-existing conditions as among the factors for evaluating risk. This further varies on the type of pre-existing health conditions,  their severity, and their impact on the proposed policyholder’s health. People with critical pre-existing conditions pay higher premiums than those with no pre-existing conditions. If you’re investing in the Shriram Life Early Cash Plan to protect your family against financial uncertainties in case of your death, you may have to pay higher premiums if diagnosed with pre-existing conditions and vice-versa.

Sum Assured

Higher sum assured leads to higher premium rates and vice-versa. You can use a reliable life insurance premium calculator to get near-accurate premium estimates based on the policy’s sum assured and other factors.

Policy Term

The longer the insurance policy term, the higher the premium is. Extended policy terms increase the chance of insurance companies having to pay a claim, resulting in higher premiums. You can use our online life insurance premium calculator to get near-accurate premium estimates.

Lifestyle Factors Affecting Premiums

Health and Medical History

Your medical history and overall health, including existing health status, pre-existing health conditions, etc., significantly impact your premium rate. For example, insurers consider people with a family history of serious health diseases or pre-existing conditions signaling diabetes, hypertension, obesity, etc., risky. 
Some insurers may request a medical examination or detailed health records to assess an individual’s risk profile. The higher the individual’s risk profile, the higher the premiums are and vice-versa. You must follow health and wellness tips to improve your overall health, leading to lower insurance premiums.

Smoking and Substance Use

Smoking and substance usage puts you at a higher risk of developing serious health challenges. Hence, insurance companies levy higher premiums on smokers and substance users compared to non-smokers. You can be classified as a smoker even if you smoke occasionally.

Avoid lying to the insurer about your smoking habits because misleading with wrong information can get your policy cancelled and claims rejected. You can use our smoking calculator to assess the financial cost of your smoking habit. This information can help you realize the extent of financial damages, giving you strong reasons to curb your smoking habit.    

Occupation and Hobbies

People working in occupations exposed to greater risk are charged higher premiums than people employed in safer professions/industries. For example, people working in industries like mining, oil, gas, construction, adventure sports, etc., are more exposed to risky environments that may result in death. Hence, their premiums charged on all retirement plans and savings plans are always higher than those charged to professionals with desk jobs. A similar rule applies to people with adventurous hobbies.

Diet and Exercise

What you eat and how you treat your body is a significant lifestyle factor influencing your insurance premium. People leading a healthy lifestyle fueled by healthy eating, regular exercise, etc., are at a lower risk of developing health challenges. It translates to comparatively lower premiums.

However, people with a sedentary lifestyle and unhealthy eating habits are subjected to higher premiums. If you want to improve the quality of your life, start following a healthy diet and regular exercise. Pair it with making the right investments in products like Shriram Life Assured Income Plan to improve your family’s financial life during challenging times, when you’re not around.

Steps to Lower Life Insurance Premiums

If you want to get lower life insurance premiums, you must work on improving your overall health and lifestyle. For example, if you’re a smoker, then make an effort to quit smoking. People with sedentary lifestyles must follow regular exercise routines and healthy eating habits to improve their health, attracting lower premiums.

You can reduce your participation in risky activities and take consistent steps to lower your stress levels. Making these changes a part of your daily life will bring massive improvements in your health condition. It may give you further financial incentives by helping you save by bringing your premium to a normal risk level premium.

Use this opportunity to get the Shriram Life Wealth Pro plan at a comparatively lower premium. This unit-linked plan can help you grow your investment while creating a financial safety net for your family in the unfortunate event that you’re not being around to provide for them. 

Conclusion

Every decision we make regarding our eating habits, activity selection, etc., influences our lives in various ways. They affect our health, quality of life, and insurance premium rates. So, if you’re planning to secure your family under generous life insurance coverage, ensure you maintain a healthy lifestyle to attract lower insurance premiums. You can make healthy lifestyle adjustments by factoring in the points discussed above to enjoy the dual benefits of excellent health and lower premiums.