Life Insurance: How Premium is Decided?
It is decided based on various factors:
- Age: Life insurance is lower for younger people and increases with age.
- Gender: Generally premium for women is lower compared to men.
- Personal Habits: Habits including consumption of alcohol/ tobacco affects the premium of the policy. These types of people come under the high-risk category. Therefore their premium is higher than others.
- Family Health History: In case of hereditary illness running in your family you have to pay a higher premium
- Occupation: If the work is very risky the premium will be higher than others.
- Amount of Coverage: If you want a higher assured sum then your premium will be higher.
- Type of Coverage: If you are a rider this would increase the plan, if you choose a longer policy then it would result in a higher premium.
- Obesity: Your obesity can result in higher payment of the premium as it may lead to different diseases such as Coronary heart disease.
What is Life Insurance? – Definition, Types, and Benefits
Earlier, Insurance looks very very different than what it looks like today. From the time of ancient Rome, there is some practice that, there was a ‘burial club’ that covers the cost of members’ funeral expenses. The earliest known life insurance policy was made in London where a company insured ‘William Gybbons’ by the contract of 400 pounds if he dies within one year. The sale of Life Insurance began in 1760 in the US where the poor and distressed widows were insured. Later it started in different countries.