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Factors Influencing Cost of Income Protection

Age, gender of the buyer and pre existing conditions

The age and the gender of the buyer have a direct effect on the cost of income protection plans. Older adults may have to pay higher premiums compared to younger adults in the 30s. Male buyers usually have to pay higher premiums compared to female buyers since male buyers are considered to be in the high risk group. Some insurance companies may also consider pre existing medical conditions before deciding the cost of the policy.

Occupation and past work record

The occupation of the buyer will definitely influence the cost of the policy. People who have low risk jobs such as office jobs will most likely be charged lower premiums compared to people who have high risk or blue collared jobs. Self employed individuals may also be charged higher premiums compared to white collared individuals who are employed by a company.

Some insurance companies consider the past work record of buyers before deciding the cost of the policy. Buyers who change jobs frequently may be charged higher premiums compared to buyers who have worked for a company for 5 years or more.

Type of contract

Buyers who want to opt for indemnity contracts will be charged a lower premium compared to buyers who want to opt for an agreed value contract since the latter offers many more benefits. Cheaper policies that offer basic benefits usually offer an indemnity contract where as flexible policies that offer a range of benefits usually offer an agreed value contract.


The insured amount will directly affect the premiums charged for the selected income protection policy. The repaying capacity of the buyer may also affect the cost of the selected policy. Buyers who want basic benefits such as limited monthly compensation payments and one or two additional benefits will be offered a cheaper policy compared to buyers who want maximum monthly compensation payments along with transplant surgery benefits, rehabilitation benefits and a death benefit.

Buyers who want add on covers such as total and permanent disability covers or critical illness covers will be charged higher premiums. Buyers who want to get an estimate before purchasing a policy or buyers who want to compare the benefits of 2 or more income insurance policies can look for comparison websites that offer these services.


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