When it comes to your family's financial security, term insurance can be a powerful financial tool in your protection plan. It offers high coverage at affordable premiums, ensuring that your family is well taken care of in the event of an unexpected event.
If you are considering buying a term plan, it is important to know that factors such as your profession and lifestyle choices can change the cost of your policy. Whether you're thinking about Rs 50 lakh or 2 crore term insurance, it's important to understand how your lifestyle can affect your insurance premiums.
The Relationship Between Lifestyle and Term Insurance
Alongside various factors, lifestyle plays a significant role in deciding the premium of term insurance. Your insurer establishes your risk profile based on your lifestyle.
The following is how lifestyle affects your term insurance:
Overall health condition: Individuals with chronic diseases, such as diabetes or high blood pressure, are quoted a higher premium rate or are required to undergo additional medical tests.
Use of tobacco and alcohol: Smoking or heavy drinking increases the mortality risk, and consequently, higher levels of premiums.
Profession: High-risk professions like mining, aviation, or building might trigger additional underwriting interest.
Physical fitness and exercise: Healthy individuals with a good BMI can be rewarded with a lower premium.
Sleep and stress: Abnormal sleep routines or stress conditions can lead to long-term health issues and therefore affect your terms of policy.
Through this understanding of correlation, you can select a policy that is suitable for your financial requirements, lifestyle, and health.
Choosing between 50 Lakh and 2 Crore Term Insurance: Which Suits Your Lifestyle
The 50 Lakh term insurance and the 2 Crore term insurance are designed to serve different financial needs. Each meets various financial objectives and family obligations, and the lifestyle component plays a vital role in deciding what might be more appropriate.
50 Lakh Term Insurance: Ideal for Early Planners
The 50 lakh term insurance policy offers a good amount of coverage at a reasonable premium, particularly for people with fewer liabilities and fewer dependents. This policy is the best option for:
Individuals with lower financial liabilities
Individuals who are looking to pay lower premiums
If you are fit, do not have any chronic ailments, and maintain a balanced lifestyle, you may be eligible for significantly lower premiums on a 50 lakh term insurance plan.
2 Crore Term Insurance: Shield for High-Earning Individuals
A Rs 2 crore term insurance policy provides significantly greater coverage and is suitable for individuals with greater responsibilities or higher incomes. This group includes entrepreneurs, those who have taken home loans, and parents who are planning to pay for their children's long-term education etc. It is especially suitable if:
You are the sole earning member of your household
You have dependents with long-term financial obligations
You lead a healthy lifestyle that enables you to take advantage of better underwriting benefits
By choosing a 2 crore term insurance policy, you also prepare yourself to meet inflation and expenses in the next 20–30 years, especially if your current lifestyle is aspirational and you want to continue that for your dependents.
Lifestyle Choices That Can Reduce Your Premium
Enhancing some of the lifestyle habits prior to selecting term insurance will result in lower costs and increased coverage.
Key habits that may lower your premiums:
Quit or decrease alcohol consumption for at least 12 months before selecting a plan
Maintain good physical health and get frequent medical check-ups
Take regular physical exercises such as walking, yoga, or strength training
Reduce stress levels through mindfulness or a good work-life balance
Sleep for at least 7 hours daily and try to take night shifts as few as possible
How Insurers Assess Your Lifestyle
When you purchase term insurance, the application undergoes a strict underwriting process. This includes:
Completing a lifestyle questionnaire: You are questioned regarding smoking, alcohol, exercise, and occupation.
Medical test: Basic check-ups to ascertain your BMI, blood pressure, sugar content, etc.
Disclosures: You'll have to make disclosures regarding any underlying illnesses or inherited diseases.
This will help the insurer assess your risk and offer the appropriate premium and policy conditions. If there are discrepancies and unreported lifestyle habits, claims may be delayed or even rejected. Thus, honesty and openness are essential.
Aligning Lifestyle with Long-Term Plans
Choosing the right term insurance isn’t just about coverage, it’s about making sure your financial safety net grows in sync with your life’s journey.
Your plans for the future: Marriage, children, property investment, or business expansion. All dictate the amount you might require.
Your financial dependents: How many people depend on you for their everyday and long-term needs?
The right policy mirrors your lifestyle choices and plans for the future, with the comfort of knowing that your loved ones will not have to resort to a compromised lifestyle if something happens to you.
Conclusion
While buying term insurance, many individuals focus solely on the premium or sum assured. However, lifestyle is indeed one of the main factors in deciding policy cost, coverage, and suitability. Before choosing a policy, honestly assess your lifestyle. All these things you do today, such as exercising, managing stress, and quitting tobacco, can go a long way toward better coverage, cheaper premiums, and greater peace of mind.
