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Lesser Known Factors that Influence Your Life Insurance Premium

Factors Influencing your insurance premium

We usually call up our insurance agent to buy or renew an insurance plans. The agent gives us a quote for the insurance plan; however, someone else you know paid a different amount for the same plan and benefits. You are confused and puts you in a dilemma to buy the policy or not.The answer is not straight forward but if you do your research you will be able to take decision with ease. The insurance premium depends on many factors. Some of them are not known or less known. 

Here are a few of the lesser-known factors that affect your premium amount:


This one is relatively known and may not come to you as surprise about the role this factor plays in deciding your insurance policy premium. The premium rates increases as the age increases. It happens as the probability of a young person contracting a life-threatening disease or passing away in their youth is very low as compared to someone older. The insurance company is of the view that a young person will make many premium payments before they have to write a cheque for a claim.


While insurance companies are not gender biased, they do believe in the scientifically proven difference in the life expectancy for different genders. Women are considered to live about five years more than men at an average. Hence a women pays much lower premiums as compared to men of the same age.


If you are a smoker, you raise a red flag to the insurance company as smoking puts you at higher risk for many ailments. Smokers end up paying a considerably larger premium amount than non-smokers, sometimes up to twice the amount a non-smoker would pay.

Family history

There isn’t a lot you can do about your genes. If you have a medical history of severe ailments such as cancer and heart diseases, it is possible it is hereditary, and it is bound to increase your premium by a more significant margin as compared to someone with no such history.

Medical examination

While purchasing a life insurance policy, you may be required to provide your health records or undergo a medical examination. Insurance companies will look for any chronic diseases that you may have or any potential health issues and make changes to your premium amount accordingly.


All of us are aware that alcohol is injurious to our health. However, it is harmful to us in more ways than one. A person drinking excessive alcohol may be charged a higher premium amount. Insurance companies make it a point to ask you if you smoke or drink before you buy a policy.

The Policy

The kind of policy you choose also affects the life insurance premium you pay. If the tenure of your policy is long, you pay less premiums and enjoy more benefits. Short-term policies are expensive usually.


While you may not know this, your profession also affects your insurance premium. The premium for workers in the hazardous industry such as mining, oil and gas is more. A risk-free profession, on the other hand, allows you to enjoy lesser premiums.

Lifestyles choices

Your lifestyle choices also affect the premium that you pay for your insurance. If you enjoy taking risks and live for the thrill and indulge in activities like racing, and climbing mountains, your premiums could be higher.


A lesser known factor, obesity also affects the premium you pay as a policyholder. Being obese has been linked to some health problems such as osteoarthritis, high blood pressure, stroke, heart diseases, and cancer-causing overall health problems and as a result, increasing your insurance premium.

An insurance company factors all these points and through a detailed underwriting process decides the premium you end up paying for your policy. Premiums may differ from insurance company to insurance company, but all these factors hold importance in the process of calculating your premium. You should know why you are charged a certain amount if you start comparing it with your agent or even asking the insurance company directly.


Learn about seven lesser-known factors influencing your insurance premium.

*Premium for 30 year old, Non Smoker Male. Policy Term: 30 years for Basic Life Cover option inclusive of Goods & Services Tax. UIN 133N058V03

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