7 factors that influence the cost of your life insurance

This is a guest post from award-wining life insurance broker; Reassured.

1) Your age

Your age is a hugely influential factor when it comes to determining the cost of your monthly premiums.

The younger you are when taking out life insurance, the cheaper it is. This is because you are statistically much less likely to make a claim.

The older you are, the greater the risk you present to the insurer; thus, they mitigate this increased risk by inflating your premiums.

A great way to lock in the lowest premium, for the highest level of protection, is to take out a policy when a young adult.

When it comes to life insurance it is generally a case of ‘the earlier, the better’.

Despite this most of us only consider taking out life insurance after taking out a mortgage or becoming a parent for the first time.

2) Your health

Most life insurance policies are medically underwritten, and an insurer will assess your BMI, alcohol consumption and general health when calculating your premiums.

Insurers obviously want to cover their risk, so if you are overweight and generally live an unhealthy lifestyle, you will naturally pay more. Some people want insurance that will last their lifetime, to cover if any health issues come up and affect their ability to insurance themselves. Learn about Guaranteed Universal Life Insurance here, and by simply researching into the option of insuring yourself for life, to avoid any unexpected changes.

In contrast, if you are a healthy weight and exercise regularly, you will pay less for your cover.

If you have a poor medical history, or currently suffer from a critical illness, you would be considered an ‘impaired risk’ and your premiums will be higher.

It is important not to try and mislead the insurer on your application, with the aim of securing lower premiums. (This is known as ‘non-disclosure’).

Doing this could result in a payout being declined altogether and your selfless investment wasted.

As well as your personal health, your family’s medical history is also taken into account.

So, if there’s a history of serious hereditary illness in your immediate family this is highly likely to influence the cost of your cover. You may want to check this out on a site like this https://www.genealogybank.com/explore/census/1900-records to work out your chances.

3) Smoking status

As a result of the undeniable link between smoking and certain serious illnesses, such as cancer and heart disease,smokers pay higher premiums.

It is common for a 50-year-old smoker to pay as much as double the price compared to a non-smoker, securing the same level of cover.

An insurer will classify you as a smoker until you have quit the habit for a minimum of 12 months.

You may be surprised to know that this also includes the use of e-cigarettes, patches and gum replacement products.

4) Level of cover you take out

The greater the level of cover you take out, the higher your monthly premiums will be.

Having life insurance is about enabling your dependants to continue living their current lifestyle, even if you were no longer around to provide financially.

But, whilst having life insurance protection is vital, it is important to make sure you have not taken out more cover than you need, as this will unnecessarily inflate your premiums.

When establishing how much cover you need, as a general rule consider:

  • The number of dependants you have?
  • The age of your dependants, (or how long until they are financially independent)?
  • The size of your remaining mortgage?
  • The level of your personal savings?
  • Do you have death in service through your employer?
  • What are your monthly family outgoings?

Once you have answered all of these questions, you will be in a good position to accurately identify the level of cover required.

5) Length of your policy term

The length of the term is also an important factor in the cost of your premium.

Long-term policies generally carry more expensive premiums because statistically you are more likely to file a claim.

When arranging your life insurance, it is important you put in place an appropriate term length to protect your loved ones.

If you have a 25-year mortgage, it generally makes sense to set your life insurance term to at least mirror this enormous financial commitment.

Similarly, if you have children, it makes sense to set the term to cover the family until they are independent.

6) The policy type you choose

Which policy type you choose also influences the cost of your life insurance.

Policies, like whole of life insurance and over 50s plans, that guarantee a payout after you pass away are more expensive, (relative to the cover amount).

In contrast, term-based life insurance which can expire if you outlive the policy tends to be cheaper.

There is also the option of taking out a joint policy.

Joint policies cover both parties simultaneously, however they only ever payout once, (usually upon the first death).

The main benefit to a joint policy is that they are between 25%-30% cheaper compared to two single policies.

The drawback is that after a payout is issued the surviving partner is left uninsured (and older).

7) Your job and your hobbies

The job you do and the hobbies you take part in can impact the cost of your premiums.

For example, if you are a deep-sea fisherman by day and a skydiver on weekends, you will be considered high-risk and pay more for cover.

When it comes to travel, insurers are not generally concerned if you travel to Europe once a year for a family vacation.

However, if you regularly travel to a country an insurer deems to be a significant risk, because of high levels of disease or criminal activity, this is likely to affect your premiums.


So, in summary, there are many factors which impact the price you pay for your life insurance cover.

Some of these you can influence, like your lifestyle. Others, you cannot, like your family medical history.

Did you know that different insurers employ different underwriting processes and as a result costs can vary wildly?

The most effective way to ensure you find the cheapest premium is to compare multiple quotes.

You can do this by carrying out research yourself online, visiting a comparison site or using an FCA registered broker.

The benefit of using a broker is that their service is usually free (they earn commission from the insurer), they can assist you with the application process and they can compare a wider range of providers.

Whichever method you choose, the most important thing is to make sure you have life insurance. You never know when your loved ones might need it.

I hope this post helps you save money on your premiums…