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How Can Smoking and Drinking Impact the Cost of Term Insurance?

How Can Smoking and Drinking Impact the Cost of Term Insurance?

While it is not possible to predict an unfortunate event, it is certainly possible to be prepared for one. That is why a prime financial advice for individuals and families alike is to safeguard their finances and their futures by making the most of a dependable life insurance policy. That being said, for most people, traditional life insurance policies tend to pose one major, specific challenge - the high cost of its premiums.

In response to this dilemma, a better alternative surfaces in the form of term insurance. The best term insurance policies essentially offer the same features and coverage as a life insurance policy, but with one significant advantage. Term insurance premiums are known for being low cost and economical, making insurance an accessible option for many.

However, not all term insurance policies are the same. There is, of course, considerable difference between the term insurance plans being offered, which ranges from insurer to insurer. But apart from this, even with the same insurer, term insurance policies can differ greatly from one policyholder to the next.

Some of these differences can be accounted for by the policyholder’s choice of tenure or premium amounts. But some of these differences boil down to how much of a risk is posed by the policyholder to the insurer. It goes without saying that the higher the risk an individual poses to the insurance company, the greater their liability, and hence the higher the cost of the policyholder's term insurance premiums.

Therefore, if there are lifestyle habits that an individual indulges in and that have a direct impact on his health, these habits directly impact his term insurance premiums as well. In particular, let us take a close look at the impact that common habits such as drinking and smoking have on one’s term insurance premium costs.

Impact of Drinking on Term Insurance Costs

While drinking alcohol in moderation is considered acceptable, excessive drinking can prove to be a grave matter of concern for potential insurers. Drinking in excess has been linked to conditions such as high blood pressure, liver and kidney diseases and coronary diseases. It can also result in mental health conditions as well as issues with substance addiction

Therefore, while evaluating your eligibility for the best term insurance policies, your alcohol consumption plays a huge part in determining your premiums. If your regular alcohol consumption exceeds a certain standard, this can reflect in your medical records as well. It will also directly increase your term insurance premiums as you become a greater risk for potential insurers.

Impact of Smoking on Term Insurance Costs

According to medical research, long term smoking has been linked to higher risks of developing conditions such as various forms of cancer, respiratory diseases, stroke and cardiovascular illnesses. Moreover, as per the World Health Organisation, the habit of smoking can contribute to the deaths of about half of the individuals who indulge in it.

In the face of such scientific evidence, smokers are typically charged higher term insurance premiums than their non-smoking counterparts. While higher, these premiums can still fall within reasonable amounts, although it is advised to reconsider one’s smoking habits to maximise the benefits of your term insurance.

A person’s term insurance cost can also be affected by how frequent a smoker he or she is. For instance, if an individual is in the process of quitting smoking, he can inform the insurer about the same and avail certain considerations. The insurer might even offer to reconsider your policy after a few years whereby you might be able to revise your term insurance premium amounts after quitting smoking for good.

If you do not smoke or drink, the best term insurance providers are certainly likely to offer term insurance to you at lucrative term insurance premiums. However, even if you do have these lifestyle habits, you can still make the most of your term insurance by signing up with the right, reputable insurer.

To that end, you can consider availing the iSelect Star Term Plan from Canara HSBC Oriental Bank of Commerce which offers extensive coverage at affordable premium rates. With the iSelect Star Term Plan, you can also avail of a variety of covers to suit your needs, such as accidental death/disability benefit, child support benefits and more. You can choose between three types of coverage: increasing, decreasing or level cover, as per your current needs and future goals.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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