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The Habits That Shape Your Premiums: Are You Paying More Than You Should?

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The Habits That Shape Your Premiums: Are You Paying More Than You Should?
January 15, 2025

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When you think of life insurance, you might imagine it as a one-time decision. All you would need to do is pick a plan. However, the premium you pay is influenced by many factors, including your lifestyle and habits. As a mid-career professional, your habits today can have a lasting effect on the cost of your insurance. Understanding this can help you make choices that lower your premiums and make your coverage more affordable. Let’s explore how your everyday habits could be impacting your insurance costs and what you can do to reduce your premium amount.

How insurance Premiums are determined

Before diving into how your habits affect your premium, it’s important to understand what insurance providers look at when calculating the cost of your premium.

Insurers typically assess 4 factors.

  • Age: Younger individuals tend to pay lower premiums, as they are less likely to file claims.
  • Health: Your current health, medical history, and any pre-existing conditions can impact your premium.
  • Lifestyle: Factors like smoking, drinking, and occupation can influence how much you pay.
  • Family history: A family history of certain diseases may increase premiums.

Role of your habits in insurance costs

Your habits can either keep your premiums low or raise them significantly. Let’s look at how certain habits can play a role.

1. Smoking: Can cost you dearly

Smoking is one of the most significant factors affecting life insurance premiums. Smokers tend to pay higher premiums because they are more likely to develop health conditions like heart disease, lung cancer, and other chronic illnesses. Insurance companies view smoking as a risk factor and tend to charge smokers higher premiums to offset that risk.

If you are a smoker and have been thinking about quitting, now is the time to do it. Not only will it improve your health, but after a year or two of being smoke-free, the possibility that insurers may offer you a lower premium rate.

2. Excessive drinking: Hidden cost

Like smoking, excessive drinking is another habit that can increase your life insurance premiums. Heavy drinking is linked to various health risks, including liver disease, high blood pressure, and a weakened immune system. These health risks make you a higher-risk policyholder for insurers, resulting in higher premiums.

Moderating your alcohol consumption can help you maintain a lower premium. Many insurers offer more affordable rates to those who drink moderately or abstain altogether.

3. Regular exercise:

Maintaining a healthy weight, improving cardiovascular health, and reducing the risk of chronic diseases all work in your favour when it comes to life insurance. Insurers view active individuals as lower-risk. So, they may offer discounts or lower premiums to those who demonstrate a commitment to their health.

Incorporating regular physical activity into your routine isn’t just beneficial for your health—it could save you money in the long run.

4. Diet and eating habits: Fuel for your premium

What you eat can also play a role in the premium amount you pay. A healthy, balanced diet can help you maintain a healthy weight, lower cholesterol levels, and reduce the risk of diseases like diabetes and heart disease. Insurers favour individuals who follow healthy eating habits. This is because they are less likely to experience costly health problems.

While the occasional indulgence is fine, consistently opting for a balanced diet can lower your risk in the eyes of your insurer. Yes, this might result in a lower premium too.

5. Stress management: Protecting your mind and wallet

In your career stage, stress is probably inevitable. How you manage stress can have a surprising impact on your insurance premiums. Chronic stress is linked to a range of health issues, including high blood pressure, heart disease, and mental health disorders. If stress affects your health negatively, insurers may charge you higher premiums.

Practicing stress-relieving techniques like meditation, yoga, or simply taking time for yourself can lower the risk of these health conditions. A balanced approach to work and life could make a significant difference in your insurance costs over time.

How your occupation can influence premiums

Your job can also impact your premium amount. Certain professions, such as those involving high-risk activities (e.g., construction, aviation, etc.), are seen as more dangerous by insurers. This means that individuals in these fields may face higher premiums due to the increased risk of accidents.

However, if your work involves sedentary activities or lower physical risk (such as desk jobs), it might work in your favour.

In some cases, your insurer may even offer discounts for occupations that are seen as low-risk. So, it’s worth checking if your job influences your premium cost.

Take control of your premiums

While you may not be able to change every aspect of your life immediately, there are practical steps you can take to reduce your premiums. Here are some suggestions.

  • Quit smoking: If you’re a smoker, quitting is one of the most effective ways to reduce your premiums.
  • Limit alcohol consumption: Reducing your alcohol intake can lower your health risks and, by extension, your premium.
  • Exercise regularly: A simple daily routine of exercise can improve your health and make you less of a risk to insurers.
  • Eat well: Opting for a balanced diet can help you stay healthy and lower your insurance costs.
  • Manage stress: Taking care of your mental well-being can reduce your chances of developing stress-related health problems.

Additionally, consider undergoing regular health check-ups and maintaining an active lifestyle. If your health improves over time, insurers may offer to reassess your premiums.

Conclusion

Your habits have a direct influence on your life insurance premium. By making healthier choices today, you can help ensure that you pay a lower premium tomorrow.

The good news is that even small changes, like quitting smoking or reducing stress, can make a significant impact on your overall costs.

As you continue your career journey, taking steps to improve your health and well-being not only benefits you personally but also financially.

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ARN: ED/01/25/20150

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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