Did you know that diverse health and lifestyle aspects may end up impacting your term insurance plan? Yes, term plans are only approved by insurance companies once they assess your eligibility and decide the proper premium amount for your chosen coverage amount. Here is a closer look at how these aspects have a vital role to play in influencing your decision to purchase a term plan.
Factors Impacting Your Term Insurance Plan
Various factors may affect the premiums for your term insurance plan. Some of them may include the following:
Tobacco consumption and smoking are lifestyle habits that may lead to various health risks and ailments throughout one’s lifetime. Term insurance policies are comparatively affordable options, and this is one of the biggest reasons behind their appeal. Yet, declaring these habits is a must, and they may sometimes lead to a significant increase in the premium amount since the insurance company will perceive your risk quotient as higher. Smokers often pay double or more compared to non-smokers.
High alcohol consumption – In case you are buying a term insurance plan, it is always recommended that you examine whether your drinking habits are regulated and under control. Insurance companies have varying criteria to differentiate between heavy drinkers and regular/social drinkers. Heavy drinkers (as defined by insurers, usually those consuming alcohol more than 3-4 times a week) are seen as higher-risk individuals. Occasional consumers may not be taken as high-risk, while excessive drinkers may be perceived as being more risky by insurance companies.
Risks related to jobs – People in occupations with higher risks, such as construction, mining, and others, always have more vulnerabilities to counter and exposure to accidents or mishaps. While purchasing a term plan, make sure that you are honest about your job and what it involves. This will help the insurance company work out a suitable premium for your policy. Additionally, consider opting for riders like Accidental Death Benefit to increase financial protection for your family in case of any unfortunate incident.
Poor driving behaviour – Although traffic violations and rash driving may indicate higher risks, most insurance companies do not assess driving behavior unless it is directly linked to your occupation or there is a history of serious motor vehicle accidents. However, if your job involves driving, insurance companies may take it into account when calculating premiums.
Additional lifestyle habits – People leading sedentary lifestyles may find their premiums increasing for term plans. Those who are not involved in physical activity may witness an increase in obesity and cholesterol levels, which are indicators of various lifestyle ailments to come in the future. These may include heart disease, high blood pressure, and more. Insurers often use BMI and other medical indicators to assess such risks.
Thus, maintaining a healthy lifestyle, avoiding excessive alcohol consumption, and limiting/giving up tobacco usage while also driving responsibly may help you reduce your premiums for term insurance policies. Keep these factors in mind while applying for the same, and always disclose information in a transparent manner. You do not want a situation where the insurance company finds out later, and there are disputes in claim settlements for your loved ones when they need the funds in your absence.