The Impact Of Your Lifestyle on Term Insurance Premiums

Ravi, a salaried person, wanted to buy term insurance. By nature, he turned out to be very adventurous and liked skydiving and scuba diving. He was also mildly addicted to smoking. Now, when he opted for a term insurance policy, he was very much surprised that his premiums were trending way higher than those of his non-smoking and less-adventurous friends. And that got him pondering over what bills his fun lifestyle had wrung out of his wallet with regard to insurance.

Like Ravi, many of us may not realise that some of our everyday habits and lifestyle choices can actually impact term insurance premiums. Here, insurers consider a lot of factors - right from smoking and drinking to weight and the quantum of stress we go through. In this article, we will explore how these lifestyle choices affect term insurance rates and what you can do to help lower your costs.

How Can Your Lifestyle Impact Term Insurance Premium?

Term insurance premiums are not decided arbitrarily; they have to do with your risk profile. Basically, the idea is - the greater your risk, the more you have to pay. In this regard, insurance companies do take a good look at your risk profile prior to deciding on the premium.

Now, here's the kicker: if you just lead a healthy lifestyle, then essentially, you are less of a risk. Being a less risky applicant to an insurer translates directly into lesser premiums. But do you know the reasoning behind this?

Well, it is because a healthy client is always insurers’ first-choice. Let’s see the other side of the coin- say you smoke, drink or indulge in other vices. Now, where do you think insurers are going to place you on their priority list?

The answer is itself in the case, i.e. there are huge chances that you might make a claim, and your premium might well go up!

5 Lifestyle Factors That Affect Term Insurance Premium Rates?

Below are 5 lifestyle factors that can impact your premiums -

• Smoking In the case of term insurance premiums, smoking is a big deal. It forms one of the biggest factors that can elevate costs. On account of the notable chance of developing many ailments like cancer, heart or cardiovascular diseases, respiratory problems, and so on, smokers take on a much greater risk. Given this higher risk, the insurers charge a premium that is priced higher in order to cover the possible costs.

• Alcohol The same goes for excessive alcohol consumption as well. Chronic drinking can drive health haywire and can entail complications such as liver diseases, heart problems or even accidents. If you drink a lot, insurance companies consider you as a risky individual, which translates to higher premium rates.

• Obesity Another major determinant that can affect premiums is obesity. It is linked to a wide array of chronic health disorders, such as diabetes, hypertension, and heart diseases, among many others. On the contrary, a healthy weight and regular exercise actually help to fetch lower premiums. This is because leading a healthy lifestyle reflects an unlikely chance of critical health issues.

• Stress What you may not know is that long-term stress can also impact your term insurance. This is because high stress levels coincide with a possibility of your mental health dwindling and all sorts of physical problems, like heart disease and hypertension, raising your risk profile. Low levels of stress and good mental health will not only simply improve your well-being but also save you money on insurance.

• Risky Sports Say you practice a lot of high-risk recreations, such as skydiving, scuba diving, etc. Such activities do increase the potential for accidents and death, and for this reason- underwriters shoot up your premiums to mitigate the risk.

Wrapping Up! ?

Every individual needs to understand the impact of lifestyle choices on premiums. Smoking, excessive drinking, obesity, stress levels, etc., everything matters to alter the cost that you pay for the cover. Living a healthier life and reducing high-risk activities will enhance your well-being and help you economise on insurance costs incurred. Paying premiums on time ensures that the policy is in force and ensures peace of mind and financial security in the event of something untoward happening to you. Also, being proactive about controlling risks to health and lifestyle can help both personally and financially; it brings peace of mind, knowing that the future of your family is just well cared for.