A healthy life will be pegged at the lower end of the premium rate band as the mortality risks will be lower, Shubrajit Mukhopadhyay, Chief and Appointed Actuary, Edelweiss Tokio Life, tells Moneycontrol.
What are the main factors that go into determining premium rates for an individual’s life insurance policy?
Pricing a term insurance product is largely about assessing the risk of one’s life based on pooling of risk approach. Premium rate varies by age and gender which is commonly known. However, there are other factors related to a lifestyle like smoking, drinking, occupation and medical history etc. which are also considered. In addition, the premium rates also reflect the experience of the target market which in turn depends on factors like city, income, education, etc. Historical data helps us understand the risk at a portfolio level for different homogeneous groups.
What should an individual do to ensure that he/she gets the lower premium rates?
