Calculating Your Life Insurance Premium
UK life insurance companies use a number of factors to determine your final life insurance premiums. The most significant of these are your age and sex. If you start your policy at a younger age, you are likely to be in better health, so will pay less in premiums.
Your sex is also a significant factor. Women live longer than men, and as a result represent a much better risk to life insurers.
If you’re a smoker, you’re going to pay significantly more in life insurance premiums, as if smoking wasn’t costing you enough already! What better reason do you need to quit? To qualify as a non-smoker, you’ll need to be free of the weed for at least 12-months - and be prepared to sign something to that effect too.
Your occupation also has a bearing on how much you’ll be paying for life insurance. Clearly if you work in bomb disposal, you’ll be more of a risk than a guy who sits behind a desk all day and it will be factored into your final life insurance premium.
Possibly the most significant factor in life insurance premium calculations is your health. If you have had health problems in the past, or an ongoing condition like diabetes, then your life insurance premiums are likely to be much higher than the norm. If this does apply to you, then don’t despair - use the net to shop around, you may have to pay more than the average policy holder, but you should still be able to find a better deal on your life insurance premiums by shopping around, and comparing online.
Don’t forget, you can choose the level of cover required - and the more cover you need, the more you’re going to have to pay for it. As a result, it pays to know how much cover you’ll need. If you have a policy to pay off an outstanding mortgage, you should ensure that you’ve enough cover to pay off this debt. If you wish to provide an income for your dependants, the level of cover required will be significantly higher – once again your life insurance provider or financial advisor should be able to offer advice as to the amount of cover that you’ll need.