10 Factors That Will Affect Your Life Insurance Premium

Life insurance policies are an important part of financial planning. As a responsible earner, you want to make sure that your family is taken care of even if you’re not around. However, selecting the right premium for your life insurance in the UAE involves several factors.

The insurance provider carefully evaluates different aspects of your profile to calculate an appropriate premium amount. In this blog, we’ll explore the top 10 factors that can influence your life insurance premium.

Age and Gender

Your age and gender play a crucial role in deciding your premium. Generally, the younger you are when buying a policy, the lower your premium will be. This is because statistically, younger individuals have a longer life expectancy. Also, women tend to have lower premiums than men due to their higher average life expectancy.

Height and Weight

Your body mass index (BMI) is closely examined by insurance providers. Being overweight or obese increases the risk of various health issues like diabetes, heart problems, and others. Premiums may increase in response to a higher BMI.

Medical History

Insurers will look at your current medical status, any previous surgeries or health problems, and family history of serious diseases. If you have had no major health problems and no risks, you can get lower premiums.

Lifestyle Habits

Habits like smoking and excessive alcohol consumption are directly linked to many health risks. If you have these habits, you’ll probably have to pay higher premiums due to your increased health risk.

Occupation and Hobbies

Your profession and hobbies also play a role in premium calculation. If your occupation involves hazardous substances, extensive travel, or dangerous environments, you are considered at higher risk. Similarly, adventure sports or high-risk hobbies can raise your premiums.

Financial History

The insurance provider will also check your financial stability by reviewing your income and debts. If your income and net assets doesn’t justify the level of cover you are seeking – the insurer might offer a reduced cover to ensure that the insurer doesn’t take on unnecessary risk and that the insured is able to afford the premiums.

Coverage Amount

The more life insurance coverage you need, the higher the premium will be. You’ll have to find a good middle ground – enough coverage to properly protect your family, but at a premium cost that doesn’t break the bank for you.

Number of Dependents

Having more dependents means you’ll need a larger coverage amount to make sure they have financial security. This means the premiums will be higher for policies with more beneficiaries.

Payment Mode

How you choose to pay your premiums can also affect the overall cost. Monthly payments often have higher administrative fees compared to quarterly, semi-annual, or annual payments. This results in lower premiums for other options.

Policy Type

Term life insurance is usually cheaper when it comes to premiums compared to whole life insurance. The reason is – the term life only covers you for a set number of years, while the whole life covers you until you pass away. That lifetime coverage makes it the more expensive option. So if you’re looking for lower premiums, term life may be the way to go.

Keeping all these factors in mind can help you get the right premium. If you have any more questions about life insurance in the UAE, give New Age Insurance Brokers LLC a call at +971 4 3573378 or write to us at info@newageib.com.