The Rise of “Lifestyle-Based” Premiums in Term Insurance

What is Term Insurance?

Term insurance is a type of life insurance where the insurance company offers to pay death benefits in the form of a lump sum payment to the beneficiary in case of the untimely demise of the insured. This type of insurance offers pure life cover, and therefore, the policy comes to an end if the insured survives the policy tenure.

The Relation Between Lifestyle and Term Insurance Premium

Insurance companies evaluate you, your lifestyle habits and health conditions to determine the premium.

Simply put, the healthier you are, the higher the chances of you getting affordable premiums and high coverage, whereas if you are exposed to more health risks, you likely have to deal with a high premium for the same coverage or even less in certain cases.

Analysing the Rise of Lifestyle-Based Premiums Term Insurance

Unlike traditional term plans, today insurance companies give your lifestyle a significantly higher weightage when it comes to deciding the premium. Let’s analyse the rise of lifestyle in insurance premiums:

The Growth of Technology

In recent years, there has been a growth in wearable technology like smart watches for tracking an individual’s health. Even insurance companies are now relying on wearable technology and advanced medical trackers to understand the health risks of policy seekers. So if you decide to go for that gym session or hit 10,000 steps every day, you are not only making your body healthier but also taking a step to lower the premium of your insurance plan.

Access to Incentives and Wellness Programs

An individual’s lifestyle has become paramount in determining the type of coverage and premium that the insurer is willing to offer. But it does not end here. Now, insurance companies are also offering incentives and wellness programs to the insured. In addition to regular health check-ups, insurance companies offer rewards for meeting specific health goals. Such wellness programs are directly linked to the insured’s term plan pricing.

Better Coverage at an Affordable Premium

As the word has spread, even policy seekers and insured are willing to take that extra step every day and become healthier. It’s a win-win for them. On one hand, they are getting healthier and on the other hand, they get better coverage under term plans at an affordable premium.

Demand for Tailored Plans

In today’s time, almost all of us are aware that when it comes to choosing health insurance, one size doesn’t fit all. There has been a significant rise in the demand for tailored term plans. This is where insurance companies rely on tracking the overall lifestyle of policy seekers to offer them tailor-made plans. It becomes a two-headed sword: the insured benefits from tailor-made policies catering to their specific needs, and the insurer benefits from offering coverage after knowing the potential risk and health conditions.

What is the IRDAI Saying?

The Insurance Regulatory and Development Authority of India is responsible for issuing rules and regulations for the insurance companies. IRDAI has repeatedly encouraged insurance companies to include active data monitoring while offering insurance plans.

Tips to Lower Your Term Plan Premium

Typically, a term plan is known for offering enhanced coverage at an affordable premium. However, to ensure that you get a term plan within your budget, here are a few tips to lower the premium.

1. Make sure to explore and compare term plans of different insurance companies to find one that is best suited for your needs.
   Pro Tip: Head to the Jio Insurance Broking portal to explore and compare the best term plans.
2. Maintain a healthy lifestyle, as it can significantly impact your premium and coverage.
3. Make sure that you are choosing the tenure under your term plan smartly.
4. Review and update your term plan at regular intervals to ensure adequate coverage at a reasonable premium.
5. To enhance the coverage for your specific needs without making a huge hole in your pocket, you can always opt for riders on your existing policy.

To Conclude

We are all living in a world where health and financial security have become a priority. In such cases, choosing a healthier lifestyle every day is a smart way forward, especially when there has been a significant rise in lifestyle-based premiums under term plans. If you still haven’t secured the financial needs of your loved ones even in your absence, then this is your sign to head to the Jio Insurance Broking portal and purchase a term plan that best meets your requirements.