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According to WHO, about 60% of the world’s population is deprived of proper medical care and services. There are many factors responsible for this lack of availability including proper education, environmental condition, lifestyle, and many more.
Out of all, there’s one factor that can be tackled, and that’s affordability. This is where insurance comes into play.
Insurance policy allows the insurer to pay a set amount, known as a premium, in a set period of intervals to the insurer. In return, the insurer promises to cover up the expenses of medical facilities, which is known as the principle.
There are over 50 types of insurance policies. Out of all, we are concerned with just the life insurance policy, that insures the life of a person and pays a predecided sum of amount, in case the insurer passes away.
But, the question is, how is this premium decided, and consequently the principle to be received by you, when your policy matures?
The very first factor that affects the premium you pay is your age. With growing age, your immune system gets weaker and the chances of acquiring a disease increases. Therefore, a younger age would mean that you pay less premium whereas the older you get, the higher you pay as a premium to the insurer.
Some occupations are more life-threatening than others. The more your occupation poses the risk of any fatality to your life, the more likely it becomes that the insurer would need to pay prematurely. For example, construction workers are more likely to get into a fatal accident as compared to a computer engineer.
Your insurance company would ask you to submit a health record or even undergo a medical examination when you decide to buy a policy. This allows the insurance to make out if they are selling a high risk life insurance policy. In other words, if you have a history of heart disorders or any other life-threatening disease, it is very likely that your insurance company would charge a higher premium. They may additionally go through your blood cholesterol levels, and any other potential threats for future sickness to evaluate your premium.
The hobbies you indulge in, and the habits you live also make a difference to your insurance premium. For example, if you are into smoking, then it is very likely that your premium would be higher than anyone belonging to a similar age group, who doesn’t smoke. Similarly, if you are fond of adventurous activities, such as sky-diving or mountaineering, your chances of falling sick, or getting accidentally killed are higher. And so is the value of your premium.
Regardless of all the other factors, the type of policy you wish to buy makes a lot of difference to the premium you pay. Depending upon the cover of your policy and the number of nominees and insured persons you include in your policy, the premium you pay varies to a great extent.
Make sure you understand the inclusions and cover of your policy before you buy it. After all, you would wish to receive the return on your investment, especially at times when you need it the most.
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