Life Insurance Rates In India

Life insurance is of the utmost importance when it comes to providing financial support to families. Serving as a crucial financial safety net, it offers much-required financial assistance in the event of the unexpected demise of the breadwinner of a family.

With the sum assured provided, life insurance serves to help in covering funeral expenses, settling debts, and replacing lost income. This way, it also enables your family, including parents, spouse, and children to maintain their current lifestyle, meet financial obligations, and plan for the future without any worries.

In India, insurance companies take several factors into account before assessing the premium of policies. In this article, we have discussed life insurance rates and how they get impacted.

Top Life Insurance Rates in India

Check out the table below for the different life insurance plans available in India along with their rates -

Which Factors Affect Life Insurance Rates in India?

Several factors can impact your life insurance premiums In India. While the exact factors vary across insurance companies, here are some common ones considered when determining life insurance premiums-

1.) Age

When it comes to determining life insurance rates, age plays a prominent role. As we grow older, the likelihood of health issues and mortality increases, which directly impacts the cost of insurance coverage. 

Younger individuals typically pay lower premiums because they have a longer expected lifespan and are less likely to face severe health conditions. However, as we age, the risk of developing illnesses and passing away increases, which makes life insurance more expensive.

2.) Gender

Gender is another primary factor that influences life insurance rates. As per statistics, women and men have different life expectancies and health risks. Generally, women tend to live longer than men and have lower mortality rates. 

Insurance companies base their rates on the likelihood of payouts, and the longer lifespan of women reduces the risk of them passing away during the policy term. As a result, women usually pay lower premiums for life insurance compared to men. 

3.) Health and Medical History

When you apply for a life insurance plan, insurance companies assess your health conditions and medical history to determine the risk of potential claims. Generally, individuals with good health and no significant medical issues pay lower premiums. 

Those with pre-existing conditions, chronic illnesses, or a history of serious health problems, on the other hand, may have to pay higher premiums, depending on the type of health issue type. This is because their health issues increase the likelihood of a claim being made during the policy term.

4.) Lifestyle Factors

Life insurance providers also consider factors such as smoking, drinking habits, and participation in high-risk activities when determining premiums. 

If you lead a healthy lifestyle and don't smoke or consume alcohol, you are likely to be charged with lower premiums. However, if you smoke or engage in risky activities like extreme sports, your rates may be higher. This is because such habits or activities increase the chances of health issues or accidents, which can lead to a higher probability of claims.

5.) Sum Assured

The sum assured refers to the amount of money that an insurance company promises to pay out in the event of the insured person's death. The higher the sum assured, the higher the insurance premiums. This is because a larger sum assured means the insurance company will have to pay out more money if the insured person passes away. 

6.) Policy Type and Duration

Different types of policies, such as term insurance, whole life insurance, or endowment policies, have varying structures of premium. In addition to that, if you choose a longer policy term, such as a 20-year term life insurance policy, the premiums will generally be higher compared to a shorter term like a 10-year policy. The reason behind this is that the insurance company is taking on a higher risk by covering you for an extended period. In this case, they have a higher chance of paying out the death benefit during that longer term - to compensate for that risk, they charge higher premiums.

7.) Underwriting Guidelines

Each insurance provider has its own underwriting guidelines and risk assessment criteria. These guidelines consider factors like family medical history, occupation, income, and financial status to determine the premium.

8.) Riders and Additional Benefits

Riders refer to optional add-ons that can enhance the coverage of a life insurance policy. The inclusion of riders, such as critical illness or disability riders, increases the premium amount as well.