Basics of life insurance:
Stripped of all fancy words, a life insurance policy is a contract between a policyholder and an insurer, where the insurer guarantees a payout of a benefit of death to named beneficiaries when the policyholder (or the insured) passes away.
Such a contract is carried out in exchange for the premiums paid by the policyholder for the duration of the contract, known as a term.
Life insurances are legally binding contracts, which is enforceable if the insurance application accurately discloses all details about the to-be policyholder.
For such a policy to remain in force, the policyholder is required to pay up a premium – it may be a single lump-sum payment, or some periodic payments over a fixed amount of time.
Factors affecting life insurance:
There are multiple insurance factors to take into account when the insurer is calculating the cost of life insurance.
Some of the major factors include:
- Lifestyle Habits
- Previous Records
- Medical History
But one of the more passive factors when it comes to determining the cost of a life insurance policy is residence.
If, say, you reside in a country where the average mortality rate is low, the premium rate on the life insurance on the plan has good chances to be lower than in a country where the mortality rate is higher.
This is because the risk of death for an individual is lower in a safer country, in comparison to another country that might be relatively riskier to stay alive in.
Other residential factors include political situation of the country, terrorist risks, living and sanitary standards, the general climate of the nation, etc. All of these are important risk factors that are taken into account before underwriting a life insurance policy.
The above is also the reason why insurers are very particular in knowing if the policyholder travels to a foreign country. They require the knowledge to calculate their increase in risk percentage beforehand, and hence are very strict about it.
We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00