How lifestyle choices affect your Term Insurance eligibility

5 min read | Updated on July 15, 2025, 11:44 IST

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SUMMARY

Aarti and Priya, identical twins from Delhi, were shocked when their term insurance premiums varied significantly. Aarti’s premium was lower, while Priya’s was higher, prompting her to joke that her iPhone caused the difference. Similarly, Rajesh and Sameer, colleagues in high-risk professions, saw drastic differences in their premiums despite similar jobs and incomes. Both situations left them puzzled and questioning the insurer’s criteria for determining premiums.

But are they right? Was the company unfairly offering a high premium to Priya and Sameer? The truth was in their lifestyle choices.

Aarti maintained a healthy routine—she walked regularly, ate home-cooked meals, and balanced her diet with fruits, vegetables, and whole grains. It helped her maintain a healthy BMI and overall fitness. Priya, however, oscillated between indulgence and extreme diets. She often over-ate or skipped meals, which affected her health, leading to a fluctuating BMI and higher health risks.

Similarly, Rajesh avoided smoking, drank occasionally, and had a clean driving history, whereas Sameer smoked regularly, drank excessively, and had a poor driving record. Such factors significantly influence an insurer's risk evaluation, leading to varying premiums.

Life choices and their impacts on term insurance

It is an industry staple that poor life choices negatively impact the premium rates of term insurance. The reason behind this is simple: A policyholder who makes poor life choices is more vulnerable to untimely death, making them a high-risk client for the insurance company. As per the simple rule of commerce, the higher the risk, the higher the price.

Simply put, your premium will also increase as the number or frequency of bad choices increases. For instance, on average, smokers pay approximately 30% more in premiums compared to non-smokers. In fact, in some cases, premium rates for smokers can be 50% to 80% higher than those of non-smokers.

Therefore, it is crucial to know what makes a poor life choice and which ones an insurance company is more likely to consider.

What is a poor life choice?

Any lifestyle choice that increases the risks of accidents or severe/chronic diseases, making you vulnerable to untimely death, is considered a poor life choice. Let's discuss some of the life choices that impact a term insurance premium the most:

Life Choices	Why do they affect term insurance	When do they affect term insurance
Smoking and tobacco use	Smoking increases health risks like cancer and respiratory diseases, leading to higher premiums or denial of coverage.	Regular or habitual smoking affects term insurance. One occasional cigarette might not matter if disclosed honestly.
Alcohol consumption	Heavy alcohol use raises risks of liver diseases and accidents, prompting higher premiums or rejection.	Habitual or excessive drinking can impact premiums. However, an occasional social drink is usually acceptable if disclosed.
Reckless driving	Reckless driving increases the risk of fatal accidents, affecting premiums or coverage approval.	Multiple traffic violations or a history of accidents can impact term insurance. Occasional late-night drives are acceptable.
High-risk profession	Dangerous jobs like mining or firefighting involve higher mortality risks, leading to higher premiums or exclusions.	A consistent job in a high-risk field impacts premiums. Temporary or minor exposure to risks may not have an effect.
Other lifestyle choices	Persistent risky or unhealthy lifestyle choices like base jumping, binge eating, or long-term sleep deprivation increase mortality risk, affecting premiums and eligibility.	Regular unhealthy habits, like extreme sports or chronic poor sleep, can impact coverage. Occasional sweets or late nights are fine.

What happens when you lie

A person purchasing term insurance is legally bound to fully disclose his/her medical history and other related factors that can impact the policy. Insurance companies can also do a medical background check on the policyholder to cross-verify the information submitted. If a person is proven to have lied or miscommunicated, the insurance company can act against such a person. Here are the steps an insurance company can take if they catch a policyholder lying about crucial facts:

If the lie or the misinformation is not severe, insurance companies usually adjust the pre-decided premium to factor in the information discovered.
In case the impact of the information is severe, then insurance companies have the right to decrease or even deny death benefits.
The insurance company also holds the right to file a criminal case against a policyholder. However, it is done only in extreme situations when it has been established that the policyholder intentionally tried to fraud the insurance company.

Needless to say, lying to the insurance company, hiding crucial facts, or making a false claim regarding medical or other factors on your term insurance policy is not wise.

To sum up

Lifestyle choices greatly impact term insurance premiums. However, it does not mean that to get a good deal with your term insurance, you must give up on all indulgences or be banned from doing anything fun. It means that if you maintain a balance, it will pay you in more than one way, and a low-term insurance premium is one of those.

FAQs

How do smoking habits influence term insurance premiums?

Smokers typically pay 30% to 80% higher premiums than non-smokers due to increased health risks associated with smoking.

What impact does alcohol consumption have on term insurance eligibility?

Excessive alcohol consumption can lead to higher premiums or denial of coverage, as it raises the risks of liver disease and accidents.

Can my profession affect the premium I pay for term insurance?

Yes, individuals in high-risk professions may face higher premiums or exclusions due to increased mortality risk associated with their jobs.

What happens if I fail to disclose my lifestyle choices when applying for insurance?

If discovered, the insurance company can adjust premiums, deny benefits, or even pursue legal action in cases of significant misinformation or fraud.

About Author

Upstox Desk

Team of expert writers dedicated to providing insightful and comprehensive coverage on stock markets, economic trends, commodities, business developments, and personal finance. With a passion for delivering valuable information, the team strives to keep readers informed about the latest trends and developments in the financial world.