How staying healthy can help reduce your insurance premium

The dawn of the new year ushers in increased gym memberships, owing to one of the most cliched new year resolutions of all time - losing weight. But the fervour of weight loss dies down in a few months (even weeks for some who lack the willpower) and the early morning alarms would, more often than not, be cancelled. But what if someone offers you a reward for staying healthy? Yes, insurance companies offer the reward of lower premiums for people who control their diet and exercise regularly. That's one more reason for you to stay motivated to meet your fitness goals!

Life insurance
As far as life insurance is concerned, taking a policy early in life helps in bringing down the premium. Young applicants are considered to bear lower risk than older customers, as they tend to be healthier. There are several lifestyle choices that can have a direct impact on your life insurance premium rates. Some of these are described below:

• Smoking - It is well-known that smoking exposes you to increased risk of several health problems, such as cancer and lung diseases. This essentially means that smoking regularly makes you a high-risk individual to cover under insurance. This subsequently increases your insurance premiums. In fact, smokers tend to pay almost double the premium that a non-smoker would pay for life insurance! Insurance companies subject the customer to a medical test to ascertain whether he/she uses tobacco products regularly. It is also expected of the customer to honestly declare smoking habits. The premiums for that person's insurance will be based on these factors. When a person quits smoking, his/her insurance premium will reduce gradually and change to basic rates after a year of abstaining from tobacco products.
• Weight woes - If an individual is overweight, he/she will pose a higher risk to the insurance company. Insurers consider the Body Mass Index (BMI) of the person and his/her measurements to determine the extent to which he/she is overweight. Obesity is often linked to cancer, heart ailments, diabetes, and several other such health issues. So, the insurance company will quote a higher premium to offset the possibility of a future claim related to these diseases.
• Alcohol consumption - Regular consumption of alcohol can put you at risk for health issues. The life insurance company will assess your level of risk and quote premiums based on that.

If you are looking for life insurance protection at low costs, it makes sense to go for a term insurance plan that offers extensive coverage at a low cost. Also, exercise regularly and eat sensibly to stay healthy. A positive change in your lifestyle, apart from promising improved health, can bring down your insurance premiums as well.

Health insurance
Health insurance companies offer generous discounts to people who are healthy. The underlying assumption for this offer is that such people will not be raising claims frequently, and hence, will bring about savings for the insurance company. Most of the leading private insurance providers have launched programmes that offer reward points to customers who engage in fitness activities. Customers can redeem points at the time of renewal of health insurance policies to get premium discounts.

For instance, ICICI Lombard has a scheme named ‘Do the Difficult' in which customers can earn points through wellness activities, such as participation in cyclothons, marathons, and other professional sporting events. Customers who have yoga, gym, or aerobics membership are also offered benefits under the scheme. The plan promotes and incentivizes healthy behaviour. Points earned through the programme can be redeemed according to the terms and conditions of the scheme.

The Stay Active plan from Apollo Munich also rewards a customer who leads a healthy lifestyle. An insurance premium discount of 8% is offered to the individual at the time of policy renewal, based on the number of steps he/she takes in a day. The assessment is done for the entire policy year and premiums are decided following that.

It is observed that such wellness programmes have been well-received by respondents in metros. Health insurance companies have also been promoting these schemes aggressively in an attempt to reduce the annual claim ratios.

Motor insurance
Although discounts are not offered to customers based on their health conditions in motor insurance, drivers between 25 and 60 years of age are more likely to get lower rates. Younger drivers actually pose more risk to motor insurance companies. However, the age limits vary between insurers. So, if you are going to purchase a car insurance policy anytime soon, you can check if you are eligible for discounts based on age.

Motor insurance companies also provide discounts to customers based on their profession. Doctors and personnel of the armed forces are liable to receive profession-based discounts. So, if you work in one of these fields, you can benefit from this discount.

Everyone should aim to lead a healthy life, not just for well-being, but also to save big on the financial front. So aim to walk more often, take the stairs instead of the lift, and break out into a dance on a sunny day!

"This is a sponsored feature and does not necessarily reflect the views of Mid-day and Jagran Prakashan."

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