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Being in the pink of health has never commanded such a huge premium. That is, in terms of discounted life insurance premium. It literally pays to be healthy today. Both life and health insurance companies are encouraging policyholders to tread the mill to stay healthy. They are rewarding the willing ones with reduced premiums or certain loyalty benefit programmes. While healthy practices are yet to earn discounted premiums on health covers, life insurance companies have been doling out term covers at cheaper rates to certain categories of individuals.

Typically, non-smokers and women are charged lower premiums in case of most life insurance policies. However, the definition of a healthy lifestyle is not confined to abstaining from tobacco consumption alone. A host of other factors play a role in determining the premium. From the life insurance company's point of view, the health of the person who is to be insured plays a critical role in underwriting the life. If the person is obese or has hypertension and/or diabetes, his/her premium will be higher, as the risk for the company is higher as compared to a healthier insurance-seeker. For instance, a 40-year-old insurance-seeker suffering from diabetes may have to shell out even double the amount of premium that would be applicable to a healthy individual.

"In general, adverse medical conditions are rated according to the severity and combinations of the conditions. So, a diabetic whose sugar levels are controlled would perhaps pay around 50% higher premiums," adds Andrew Cartwright, chief actuary, Kotak Life Insurance . "However, if diabetes is not under control and is associated with other adverse factors (like obesity, smoking, hypertension, family history etc), the case may be rated much higher or may even be declined depending on the various adversities and combinations impact of the risk markers."

Star Treatment: Things get even better if you fall in the sought-after category of high net worth individuals (HNIs). While most life insurance policies offer discounts to non-smokers and women, some insurers like ICICI Prudential Life , Birla Sun Life , SBI Life and Kotak Life offer a special category of term policies, primarily aimed at affluent individuals. They are presumed to have lower mortality rates, thanks to their lifestyle, which is assumed to be less prone to risks. They take good care of their health and also have access to quality healthcare which, by and large, ensures that they are hale and hearty most of the time.

The minimum sum assured for such policies is usually `25 lakh and some companies offer an additional discount for those opting for a cover higher than `1 crore. "Our preferred term plan provides a big discount to non-tobacco users. By selecting the better (lower) risks in this way, we are able to offer better rates to a large proportion of clients who do not smoke/chew tobacco or use tobacco toothpaste. In other words, those who do not consume tobacco in any form," explains Mr Cartwright.

Source: The Economic Times