Life Insurance -
How much will your life insurance cost
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Life insurance is generally thought to be a cheap financial product, especially considering the security and peace of mind it gives you in the long term. There are, however, a number of variables that will have an impact on the cost and should be taken into account when considering whether you can afford to take on a life insurance premium. For instance, female life insurance policies are sometimes cheaper since, on average, women live longer than men. Over 50 years ago, the average life expectancy was 71 years old for women and 67 years old for men. Now those figures stand at an average of 82 for women and 71 for men.
When looking at how much life insurance is going to cost you, remember that the prices differ depending on the product and level of cover it offers. If you are looking for affordable security, then it might be worth considering term assurance. This is the original type of life insurance and is generally cheaper than other types of life insurance that are now available. Term assurance has now dropped up to 50% in price compared to 10 years ago according to Lifesearch.
Something that can affect the premiums of different life insurance companies is the underwriting policies which are different for each firm. These are closely related to interpretations of mortality rates tables. The problem with this is that mortality rate tables are quite slow at keeping up with advances in medical care and diagnostic techniques. Even though surveys are conducted on a regular basis, underwriting departments of insurance companies have to be able to look at ongoing health trends and assess them in order to adjust premiums for certain age groups and life styles.
So what counts towards your premiums? When determining premiums, age and gender are the two basic factors that will be taken into account. Basically, the older you are, the more your life insurance will cost because, frankly, the more likely you are to die sooner. As a rule, the longer the policies’ duration is, the more expensive it will be and extra options added on to your cover, such as terminal illness cover and critical illness cover, will increase the price of your premium. Your career and lifestyle are also important and will be taken into account. Life insurance companies have lists of “high risk” occupations, including bomb disposal officer, fisherman and construction worker and if your job falls into this category, you will most likely have to pay a higher premium. Additionally if you enjoy the odd rock climb or can think of nothing better than swimming with sharks in your spare time, then it is likely your premiums will be higher than usual. Disabilities, whether physical or mental can also mean you will pay more for cover.
If you have a pretty regular job and lead a relatively normal lifestyle, you are still not necessarily safe from raised premiums. Your health is also a crucial factor that will be looked at by insurance companies. Heart disease, cancer, high blood pressure and diabetes are all cause concern for underwriters. Even if you are free of these things yourself, if any of these illnesses are present in your family history you will be hit with a higher premium. Recently, factors such as weight have also had a rising significance in the amount you pay. If you smoke you will have to pay more, for instance, if a 35 year old non smoking male took out £100,000 of life insurance with a 20 year term, he would expect to pay around £8 per month. However, if the man was a smoker, he would expect to pay around £13 each month. It is, however, thought that obesity will soon overtake smoking as the number one cause of death in the UK and in some cases premiums quoted to obese customers are around 50% higher and in extreme cases, even refused entirely.
If you want affordable life insurance, there are measures you can take, even if your occupation puts you in a high risk category. Primarily, look after your health; insurers appreciate that for obvious reasons and it will benefit you in more ways than just financially.
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