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Factors that determine the premium of term insurance plans

Your age is the most important factor when it comes to determining how much premium you would pay for your term plan. Life insurers usually divide people into various age groups that have people with similar mortality rates. It is this mortality rate that goes a long way in determining the premium they ask you to pay on their policies. Mortality rate increases as you get older. This means that the older you get the higher premium would you have to pay for your term insurance policy. This is why if you want to save money on these policies you need to buy them as early as you can in life.

 Your gender 

This is connected to mortality as well. In general, it has been seen that women have a longer lifespan than men and this is applicable for all age groups. So if you are a female you would get the best term insurance policy premium rates from every insurer that you buy the policy from. You would have to pay a much lower premium than a male would have to for the same policy and the same age.

 Your profession 

This also plays a major role. You can easily use a term insurance calculator and find out how your job affects your premium. The job that you do determines the kind of environment you live in and how good your health condition is at several levels. Some job profiles always demand more from you than others do from a physical standpoint – they carry a higher level of stress. So, if you are working in a job where the physical stress levels are high your life expectancy would differ as well. Your age is also connected to this. Usually, people who work desk jobs get the best premium rates because their jobs are considered the least risky.

 Your address 

Mortality rates may differ for the area where you live. If the difference is quite high it could determine the rates that are applied to life insurance policies of people who live in those areas. It is reflected in the premium that you are asked to pay. If you live in a place where you get a lot of natural disasters such as earthquakes, tsunamis, and floods you have to pay a higher premium. However, you can be sure that with an insurer such as PNB MetLife this would not be such a major issue at all.

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The factors that determine the premium you pay for your term policy

Age is the most important factor that determines the premium you have to pay for your term plan policy. The thing is that the earlier you buy such a policy lower are your premiums for the same. Thus, it is better for you that way. The thing is that the older you grow higher are the chances of claims being made by your beneficiaries for your death. So, the insurer would increase the rates according to your age as well. For the same policy, a 35-year-old man would have to pay a 35% higher premium than a 30-year-old man.

 Gender 

It is common knowledge that women in India have to pay a lower term plan premium than men. Much of this boils down to the fact that they enjoy a higher life expectancy. Since women are expected to live longer and thus reduce the chance of making a claim on the policy the insurers are willing to provide them lower premium rates. It is seen that for the same policy a woman would have to pay a 12% lower premium than a man. 

 Policy period and sum assured 

Always remember that with a higher policy period the chances of a claim raise as well. This is why in such cases you have to pay a higher premium. The same can also be said of the term insurance coverage amount you have chosen in this case. Life insurers these days are ready to insure you till 85 years as well. However, you have to be careful in this context and choose a plan that lasts only till your retirement. You also need not choose an exorbitantly high sum assured amount. You should choose a sum that would protect your family adequately enough. For example, you may have to pay an 18% higher premium for a policy with a longer-term period.

 Your habits of smoking and drinking 

You may think that buying from an understanding insurer such as PNB MetLife would help you avoid the high costs that usually come when you have a habit of smoking and drinking. But that is never going to be the case. The moment your insurer comes to know of this it would raise the rates to cover the risks that are associated with insuring people like you. Do you smoke? Then you would have to pay around 50% more in premium than someone who does not do so for the same policy.