7 Key Factors That Affect Your TROP Insurance Premium

1. Age Factor

The age at which you buy your policy plays a significant role in determining your TROP premium. Simply put, the younger you are, the less premium you pay. This is because younger and healthier individuals tend to pose a lower risk of developing health issues, thus being lower risk for insurers to cover.

• Mortality risk is generally lower for younger people.
• Starting early secures a better rate because premiums remain fixed throughout the term.
  Example: A 25-year-old non-smoker might pay significantly less than a 40-year-old for the same coverage and term.

2. Health Condition Impact

Your current health and medical history play a big role in what you’ll pay. Conditions like diabetes or high blood pressure can raise your premium.

Insurers may ask for a medical test, and being honest about your health can help you get the right cover and avoid issues during claims.

3. Smoking Status

The use of tobacco, either through smoking or other ways, will raise life insurance premiums. Smoking is considered a high-risk factor as it can lead to various severe health conditions. In fact, smokers typically pay substantially higher premiums depending on the insurer’s underwriting criteria. If you intend to buy a TROP policy, consider quitting smoking early enough to save on premiums.

4. Sum Assured Correlation

The sum assured is the guaranteed payout to your nominee if death occurs during the policy term. It directly influences the premium amount. The higher the sum assured, the higher the premium will be. Thus, your choice regarding the sum assured should balance your financial responsibilities, family requirements, and affordability.

5. Policy Term Length

Your term length will directly affect your premium since longer terms usually command higher rates but offer greater protection. A 30-year term will be priced higher than a 10-year term, provided everything else stays the same. The longer the term, the more the policyholder can cater to their long-term financial security needs and benefits upon maturity.

6. Occupation and Lifestyle Choices

Individuals in high-risk occupations, such as mining or aviation industries, and those with hazardous hobbies, such as skydiving, scuba diving, or motor racing, generally pay higher premiums.  Be honest in revealing your lifestyle activities because failure to disclose could lead to various complications in the future, especially during the claim settlement process.

7. Add-ons and Riders

The TROP policy can be enhanced with various riders, such as critical illness cover, accidental death benefit, disability income benefit or waiver of premium. Although these riders enhance your policy, they also increase your premiums. A choice must be made whether the additional premium is worth the extra coverage.