6 Factors That Affect Your Insurance Premiums

Factors that affect your insurance premiums

Pay a sum of money to an insurance company, and you get a bigger sum in return if bad things happen to you. That’s how insurance works, generally. We previously wrote about the different kinds of insurance premiums there are, and the modes of payment. However, have you ever thought about what affects the premiums for your plans? In this article, fundMyLife lists the factors that affect your insurance premiums.


There’s a commonly touted saying that you should get your life insurance while you’re still young. When you’re young, there is a lower risk that your insurance company will pay you any time soon. On the other hand, once you’re older, there’s higher risk for the insurance company to need to pay out. As such, you would need to pay relatively higher insurance premiums if you get your insurance later in your life as opposed to earlier.

Does it mean you should get life insurance as soon as you’re born? Not necessarily, especially when you do not have dependents yet.


More specifically, your biological sex. Get your mind out of the gutter. Statistically, women live longer than men. As such, with the higher risk of dying, men will pay more than women at every age to reflect that relatively higher risk.


Smoking status

Smoking is associated with a lot of health problems later in life. It ranges from respiratory diseases to coronary heart disease to the deadliest – lung cancer. As such, smokers pay a higher premium compared to non-smokers because smokers are likelier to die earlier.


Not all occupations are dangerous, but conversely not all are safe either. Office workers are less likely to die during their work as opposed to, say, a firefighter. As such, depending on how risky your work is, your premiums may differ to reflect the level of risk your job brings.

Health status

If you’re unhealthy, you’re at risk of contracting more diseases and live a shorter life. For example, if you are overweight, you contract obesity-related diseases such as heart disease or diabetes. As such, if you’re not at the pink of health, your premium increases.

On a related note, in the recent years insurance companies are incentivizing consumers to get healthier via innovative solutions. For example, AIA Vitality gives you premium discounts and ManulifeMOVE gives you premium cashback when you hit a certain number of steps a day. This is a win-win because consumers reduce their rate of mortality, and insurance companies do not have face too many claims due to a pool of healthy insured individuals.

Coverage amount

At the risk of sounding obvious, one of the factors that affect your insurance premiums is the coverage amount. More specifically, the more you insure yourself for, the higher the premiums. Insuring yourself for $500,000 will definitely be more expensive than if you insured yourself for $100,000. This case is true for all kinds of insurance, not just life insurance.

Mode of payment

As mentioned in our previous article on different modes of payment for your insurance. Paying annually saves you a bit of money as opposed to paying monthly. This is because insurers are also unsure about how regular the payment will be if you do monthly as opposed to yearly. As such, the premiums are cheaper if you pay annually as opposed to monthly. While it’s cheaper to pay all at one go, you must carefully consider your existing liquidity and not end up having no cash when you need it.

Pre-existing conditions

When/if you have pre-existing conditions, you have a higher chance of being hospitalised or getting injured or even die.

As such, usually you get completely rejected when you want to buy insurance. However, if the pre-existing condition is not severe enough, sometimes the insurance company will increase the premiums to reflect the additional risk of taking you on.

Connect with fundMyLife financial advisers today!

There we have it, the factors that affect your insurance premiums, relative to other people who are getting the same product. For most parts, we here at fundMyLife believe that products are more or less competitive. The advisers on the other hand, are more crucial parts of your financial planning.

What’s that? Haven’t found a good financial adviser? Worry not – fundMyLife got you bro. You can connect with our panel of experienced and awesome financial advisers, curated by us. Head on over to fundMyLife and ask our awesome financial advisers questions. Alternatively, you can check out our curated pool of individual advisers and ask them questions directly.

Been doing lots of research, but not sure who to engage to take the final step? Look no further! fundMyLife connects you to credible and incredible financial advisers privately and anonymously, based on the financial planning questions that you ask. We aim to empower Singaporeans to make financial decisions confidently.

Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.

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