We live in an era where couples discuss different aspects of finances before getting married. When it comes to term insurance, they evaluate the cost of their coverage, additional and optional coverage for specific risks, etc.
While doing so, one interesting thing that catches their attention is how their gender impacts their term plan premium rates. However, some may believe that having a specific gender can result in a higher or lower rate, but that’s not always the case, as gender is not the only defining factor of term policy premiums.
This article will examine whether gender plays a role in term insurance premiums.
Why Does Gender Affect Premium Rates?
There is a difference in term insurance premiums between genders because men and women lead very different lives. Their focus areas, circumstances, and health areas are incredibly different. Women are more associated with specific women-related coverages such as maternity and critical illness such as breast cancer, which consequently tends to charge a higher term policy premium. Men have areas of concern, such as stress-related diseases, lifestyle, risk-based jobs, etc.
Is There a Significant Difference?
Although some may think there is a significant difference in premiums based on gender, that’s not the case. It ultimately depends on the term insurance plan coverage you opt for. Term plans are tailored based on an individual’s requirements.
Also, certain insurers offer specific plans designed for a particular gender to better address the uniqueness and requirements of the policyholder. For instance, the term insurance for a housewife is specifically created to meet the needs of homemakers who want to secure their family with life insurance coverage.
Gender-based Factors that Influence Premium Rates
- Risk profiling based on gender
The practice in which differential premium rates are charged for different gender is known as gender rating. When evaluating the premium for the insurance, insurers carry out risk-based profiling based on potential risk, mortality, accidents and mobility. And gender plays an essential role as medical conditions vary in genders.
For example, term insurance for a housewife may carry lower premium rates than a regular term plan purchased by a male policyholder.
- Lifestyle disorder based on gender
According to studies, it has been seen that men are more likely to experience a heart attack as compared to women. In fact, this risk is high even after the other traditional risk factors in women for heart disease, high cholesterol, high blood pressure, diabetes, body mass index, and physical activity are accounted for.
- Life expectancy based on gender
As per research, the life expectancy at birth for males in 2021 was 73.2 years, while the life expectancy for females at birth was 79.1 years. Hence, life expectancy is also a crucial factor for insurance premiums. Insurance companies use this information to create plans tailored to each factor, considering associated risks and costs.
Some insurance providers, such as Tata AIA Life Insurance, provide preferential premium rates to women policyholders if they buy a Tata AIA term policy.
- Benefits of gender-based policies
- Gender-based policies are tailored to meet specific needs.
- Companies offer women-centric policies covering breast, maternity, and cervical cancer.
- Specific policies are created considering men and cover medical conditions such as diabetes, stress-related illnesses, and hypertension.
- Some policies may offer built-in coverage or add-ons for gender-specific health concerns.
Conclusion
While gender does affect the insurance premium, it is not the sole determining factor of the premium rates. Insurance companies consider various other aspects, such as risk profiling, lifestyle disorders, and life expectancy, to tailor policies that cater to the specific needs of each policyholder.
Therefore, it is wise to evaluate the different policies and select a term policy that meets your needs. Gender-based policies are advantageous as they offer coverage associated with specific risks and consider all unique factors related to gender aspects.