5 Factors That Affect the Cost of Life Insurance


Have you ever wondered why some people pay more for life insurance than others? Life insurance costs can vary somewhat based on several factors. Understanding these factors can help you make informed decisions when purchasing a policy.

We’ll look at the main factors which impact life insurance costs, as well as how you can reduce your premium rates.

1. Age

One of the most significant factors is your age. Generally, the younger you are when you purchase a policy, the lower your premiums will be.

This is because younger people are considered a lower risk of dying during the term of the policy. As you get older, the cost of cover typically increases because the risk of death increases with age.

While older individuals can still get cover, they may end up paying higher premiums compared to someone who is younger. Policies like over 50s life insurance can have waiting periods before a payout can be issued.

2. Health

Your health also plays a major role in determining your life insurance costs. Insurance companies will evaluate your overall health and may require you to undergo a medical exam as part of the underwriting process. If you are in good health, you are likely to qualify for lower premiums.

If you have pre-existing medical conditions, you may be charged higher premiums or even be denied cover. Be sure to disclose any health problems to your insurer. If not, you risk having your policy cancelled or a claim being denied in the future.

3. Lifestyle

Lifestyle choices can also affect the cost of your cover. For example, if you engage in hazardous activities, such as skydiving or racing, you may be considered a higher risk by insurance companies and be forced to pay higher premiums.

The same goes for if you have a dangerous occupation, such as working in construction. In this case, you may face higher premiums due to the increased risk of injury or death.

4. Cover type and amount

Some types of cover can be more expensive than others, as well as the amount you wish to be covered for.

Term life insurance provides cover for a specific time. It’s typically more affordable than whole life insurance, which provides permanent cover. However, with term life insurance, the policy has an expiry date. So it really depends on how long you want to be protected.

Another option is joint life insurance. This provides cover for two people under a single policy.

Going back to the cover amount – the larger the amount, the higher your premiums are likely to be.

Think about what your loved one’s need cover for. For example:

  • Living costs
  • Mortgage or rent payments
  • Childcare expenses
  • Education costs
  • Debts and loans
  • Funeral expenses

5. Insurance company

Different insurers have different underwriting criteria and pricing strategies, so it’s worth doing your research. Comparing quotes from multiple insurers is an easy way to find affordable cover, especially thanks to online comparison sites. Some insurers may offer discounts or special rates for certain groups, such as non-smokers.

How can I save money on life insurance?

There are several ways you can save money on your life insurance premiums:

  • Maintain a healthy lifestyle: Regular exercise, eating a balanced diet, and avoiding smoking can help lower your premiums.
  • Compare quotes: Shop around and compare quotes from different insurance companies to find the most affordable cover.
  • Consider term life insurance: This is usually cheaper than permanent cover. If you’re looking to buy cover on a budget, this might be a useful option.
  • Bundle policies: Some insurers offer discounts for bundling multiple types of insurance together. This might include combining your life insurance with other policies, such as car or home insurance.
  • Opt for joint cover: If you and your partner both need life insurance, consider getting a joint policy instead of separate ones. This type of policy can be more cost-effective, with lower premiums compared to having separate policies.
  • Review and update your cover: Your circumstances change a lot of time. For example, you may have got married or have kids after taking out cover. Make sure to review and update your policy. This will ensure that you have the appropriate amount of cover without paying for more than you need.
  • Choose a shorter term: If you only need cover for a specific period of time, such as until your mortgage is paid off or your children are grown, consider choosing a shorter term. This can help lower your premiums.

Don’t rush into anything. Take the time to carefully review all of your options and consider your circumstances before purchasing a policy. This will give you a chance to research and compare different cover types and find the best value for money.








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