How Family History Affects your Term Life Insurance Rates

July 21, 2021
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Buying a term life insurance provides you a life cover during the policy term. This insurance policy pays a pre-specified sum assured amount to your nominee or beneficiary, in the event of your unfortunate demise during the policy term. An insurance company computes the term insurance premium on the basis of several factors, including Current Age, Gender, Job Profile, Amount of Life Cover, Family History, Smoking/Drinking Habit, and Present Health Status.

In this article, we are focusing on the Family History and how it impacts your term insurance premium.

Your family’s medical history is taken into account by the underwriter before providing you a life insurance coverage. If any member of your family has critical illness, the insurance company considers it a major factor while underwriting a policy. When either or both of the parents or any close family member has a medical history of critical illness(s), it is of high probability that it can impact your life as well. In such case, the insurance company will provide you a life cover with increased term life insurance rates, considering the risk of such illnesses on your life.

The impact of family history on mortality risk has 3 aspects.

Heredity: Certain diseases that can be transmitted from one generation to another, may be from parents to children.

Average Longevity of the Family: When the parents have died early due to diseases such as heart attack or cancer, it is an indication that the offspring may also not live long.

Family Environment: The environment in which the family lives also lead the exposure to infection and other risks.

Here is the list of the main diseases that are considered as adverse family history.

  • Cancer (all types)
  • Heart Diseases
  • Diabetes
  • Kidney failure
  • Lung disease, etc.

In case, if one of your family members suffered from diabetes, it may or may not have a huge impact on the premium. How much premium will vary actually depends on the insurer, as one insurer may increase premiums on the basis of family member’s illness, however, another insurer may not increase the premium for such family history. It entirely depends on the underwriting terms of the insurance company that which family history will cause a rise in the premium rate and up to which extent.

If your family history is full of  health problems and diseases, there is a probability that the insurance company will deny you from providing the coverage. Even, if you have a family medical history, it is recommended to put yourself in excellent health. If you are not smoking cigarettes and not consuming other nicotine products, it will simply increase the chances of getting your life insurance approved.

Don’t Hide Family History

There are millions of people who skip providing the information regarding family history to get a life insurance policy, but it is one of the worst mistakes you should avoid. If you hide the family history while filling the proposal form, the insurance company may reject the death claim amount that would defeat the entire purpose of buying a term policy.

If you are worried about denial of coverage due to severe family medical history, don’t worry still there are chances for you to get a term life cover.

There are insurers that provide cover for serious illnesses such as critical illness and terminal illness.

  • ICICI Pru iProtect Smart Plan provides financial cover for your family plus covers 34 major illnesses such as Heart Attack, Cancer, Kidney Failure, etc.
  • Aegon life iTerm insurance plan offers life cover with inbuilt terminal illness benefit and critical illnesses are also covered through optional coverage.
  • Kotak eTerm Plan offers life cover with coverage for critical illnesses with the help of Kotak Critical Illness Benefit Rider.

Conclusion

When it comes to buying a term plan, a family medical history will increase the premium rate, basis the risk that may carry on your life. To be on the safe side, it is hereby advised to lead a healthy lifestyle that will help you get the term life insurance at the comparatively low premiums.

In case of adverse medical history, you can opt for term plans providing cover for serious illnesses that would help you get a financial cover, in case of diagnosis of such illnesses. Moreover, prior to buying, it is advisable to compare plans online and buy the one available with the lower term life insurance rates.

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Insurance

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