header Life Insurance

Little Secret: 8 Factors That Decide Your Life Insurance Premium

By Vikas Chandra Das
21 July 2022, 11:46 AM
8 factors that decide your life insurance premium

To avail the coverage of the risks associated with life, you would have to pay an insurance premium to your insurance provider. The amount paid as an insurance premium will vary depending upon various factors.

The premium for a life insurance policy is calculated by the process of underwriting. Various analyses are done based on mathematics and statistics by the underwriters. These analyses would help in determining the probability of claims in a life insurance policy.

Major Factors Which are Affecting Your Life Insurance Premium

1. Your Age

Your age is the primary factor to be considered while deciding on your life insurance premium. The primary reason behind this is that when you are young, you would have the lower probabilities of being affected by diseases. Moreover, you would also select a life insurance policy that would be of a longer duration. This means you would be paying a premium for a longer duration as compared to someone older. So, if you purchase your insurance policy at a young age then your premium would be less as the risk factor involved in your case would be low.

2. Your Habits

Smoking and drinking are highly injurious to health. By these habits, you can increase the probabilities of being affected by dreadful diseases. If you have the habits of smoking or drinking, or both, then you would be paying a higher premium than those who do not have any such habits. Your premium can be higher by around 40%-60% if you have any such habits. 

3. Your Gender

Most insurance providers believe that women tend to have a higher life expectancy than men. So, women would be paying the insurance premium for a longer duration of time and even at a lower rate.

4. Policy Term

Policy term is an important factor in the determination of the premium of an insurance policy. The longer the duration of the life insurance policy, the lower is the premium of the policy. It is always advisable to purchase long term life insurance policies to avoid paying huge premiums.

5. Your Health 

Insurance providers will ask you to undergo several medical tests to have an idea about the current status of your health. The results of your medical tests would help the insurance provider to understand the current status of your health and decide on your premium. So, if you are fit medically, then it would help you in obtaining a lower premium for your insurance policy. For example, you are suffering from obesity then it would increase the probabilities of being affected by several other ailments like diabetes, high blood pressure, heart ailments, etc.  These ailments are very dreadful and can increase the chances of death thus, leading to an increase in your insurance premium.

6. Your Profession

Your occupation has a great impact on the premium you will pay for your insurance policy. There are some occupations which are highly dangerous like fire fighting, mining, shipping, coal mining, working in industries, etc. If you are working in any such place, then your risk of life is higher and so, you would have to pay a high insurance premium.

7. The Platform Used to Buy the Policy

The premium of your life insurance policy would also depend on the platform which you are using to purchase your policy. Today, due to increased usage of the internet and smartphones most of the insurance companies have provided the facility of purchasing insurance policies online. By purchasing your insurance policy online, you would be paying a lower premium as many other additional costs like commission, administrative costs, etc. are reduced. If you are purchasing your insurance policy by offline means it involves intermediary costs such as administrative charges, paperwork, commission, etc. These charges add up and increase the premium of the insurance policy. To encourage customers to buy online, many insurers offer lower premiums if purchased online for the same policy than offline. 

8. Frequency of Premium Payment

There are several premium payment methods such as monthly, quarterly, or yearly, etc. Your insurance provider would charge a higher premium based on your premium payment frequency. Suppose, you would be making your insurance premium payment every month then there would be some expenses related to your provider such as the collection cost, administrative cost, etc. However, if you are planning to pay your premium annually then your insurance provider would obtain the amount in one go thus, reducing your premium amount as well.


So, how these factors would be affecting your policy premium would depend upon the way your insurance provider treats these factors and what are its rules related to these factors. You must research the various policies available in the market, their premium rates, coverage provided, and choose the one which provides maximum cover at a nominal premium.

Life Insurance banner
Life Insurance

Upto ₹25 Lakh Saral Jeevan Bima

Enter your details to buy Life Insurance
/ /
By proceeding, I agree to the Terms & Conditions