‘Insurance Premium’ refers to the amount that one has to pay
at intervals to an insurance company in order to keep an insurance policy active.
The factors that determine a premium for the insurance plan
are:
Age: Younger people are considered fit an healthy but as ones
age increases, they are more exposed to health risks and hence the insurance
premium goes up.
Lifestyle: Lifestyle habits like smoking and drinking or
chewing of tobacco increase the possibility of health disorders and thus the premium
amount for individuals consuming the same increases. Insurance companies always
inquire if a person is a smoker or a consumer of alcohol.
Profession: Industries with risky working conditions like
mining, oil and gas etc. propose a higher risk to life and therefore the
premium charged is higher.
Obesity: Obese people are prone to health disorders like
osteoarthritis, high blood pressure, stroke, heart disease, etc. and thus pay a
higher premium.
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