Know About The Factors That Affect Your Term Insurance Premium

Know About The Factors That Affect Your Term Insurance Premium

When one chooses to buy term insurance online, they provide their families much-needed financial support in the terrible event that the breadwinner passes away.

If you intend to buy term insurance online, you must compare the premiums of different policies offered on the market. Most people begin the process of purchasing a term plan in this manner. They search for policies from various insurers, weigh their advantages, contrast premiums, and that’s it. After that, they decide to purchase term insurance.

Although these procedures for purchasing a term plan appear to be adequate, they omit a critical step: understanding the reasons behind why the term insurance rate increases. We will discuss in detail the elements that contribute to an increase in term insurance premiums in this article.

Factors that influence the rise in term insurance premiums:

The following are some of the main variables that influence the rise in term insurance premiums: 

  • Age 

One of the key variables that affect how premiums of term insurance are calculated is your age. In other words, term insurance costs rise according to the policyholder’s age. It is simple to grasp why age is a factor that life insurance companies use to determine premiums. A young person has a lower chance of developing lifestyle diseases that advance with age or pass away unexpectedly before their time.

  • Health condition

Both you and the insurer you choose to get term insurance from are concerned about your health. This is the rationale behind why the majority of term insurance policies demand that you go through a medical evaluation. The results of these medical tests can give the insurer a thorough picture of your health, including any existing conditions you have. 

The term insurance premium that has to be paid for a particular life cover can then be calculated using this medical information. Certain conditions may result in you paying a higher premium for a term policy than someone who is healthy.

  • Gender

When using an online term insurance premium calculator, you may be required to enter your gender. The truth is that usually, women have a greater average life expectancy than men. This translates to women keeping their term insurance coverage for a longer period of time. They can therefore benefit from decreased premiums.

  • Smoking habits 

According to research, smokers have a higher risk of developing heart disease and lung cancer than non-smokers. The risk is 25 times higher for men specifically to acquire lung cancer.  All of these risk factors are reflected in the rise in term insurance premiums for smokers. If you used to smoke, it would be prudent to inquire with the insurer about whether your present way of life can prevent an increase in your term insurance price.

  • Occupation 

Despite being one of the less important elements, it might affect the rise in term insurance premiums. Some occupations, like that of a pilot or construction worker, constantly require people to perform actions that endanger their lives, increasing the likelihood that their lives may be lost. Their life insurance application could result in a higher premium. Different insurers may have term insurance policies with varying premium increases based on occupation. So, keep this in mind when you buy term insurance online or offline.

  • Lifestyle

Your manner of life indirectly affects the rise in term insurance premiums. For instance, the likelihood that you may have liver issues in the future is significant if you routinely drink alcohol. The insurer can determine the associated risk factor by being aware of the policy buyer’s habits. On the other hand, if you don’t drink or smoke, you’ll lead a healthy lifestyle and help keep the cost of term insurance from rising.

  • Chosen sum assured

Generally speaking, the premium of your term plan can increase in direct proportion to the sum assured you select, meaning the bigger the sum assured, the higher the premium.

It is important to keep in mind that the premium for the term insurance policy can generally increase as the coverage amount increases. This is because a higher coverage amount means a greater financial risk for the insurance company, and therefore a higher premium is required to offset that risk.


To sum up, several factors can impact the premium of a term insurance policy, including age, health, occupation, lifestyle habits, the coverage amount, and so on. Understanding these factors and their impact on premiums is essential to select the right policy that offers adequate coverage at an affordable premium.