Finding the right life insurance policy can be difficult. With such a wide range of policies available, it can be hard to know which is best for you.

On top of this, you have to consider the cost, which can mainly depend on factors such as age and health. We'll explore these factors in greater detail, with tips on how to find affordable cover.

 

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What is a life insurance premium?

A premium is a monthly or annual payment made to your insurance provider to maintain the policy. It ensures that those listed on the policy can receive a payout if they pass away while covered.

If you stop paying your premium for life cover, there is a risk that a policy may become void due to a lack of funds. As a result, any subsequent death may not provide compensation to your family/loved ones in their time of need.

If you are facing financial difficulties and can no longer afford your premiums, please contact your insurer as soon as possible to stop the plan from lapsing automatically. They may have a scheme that allows you to keep the cover.

 

Age as a factor in life insurance premiums

Age is a key factor in determining premiums, as insurers may view older people as having a higher risk of death. This means premiums for those aged 65 or over are often significantly more expensive than for those aged 25-45.

The reason for this is simple – the older you are, the more of a risk you become to insure. As a result, the insurer may charge a higher monthly premium to cover this risk.

 

Health as a factor in life insurance premiums

Health can also be a key factor when it comes to life insurance premiums. Insurers will assess an applicant’s health to determine the amount of risk they are taking on.

For instance, someone with a serious medical condition, such as cancer or heart disease may be charged more for cover. This is because there is a greater chance that they may develop further complications during the term of their policy.

However, there are options available for those with pre-existing medical conditions. For example, guaranteed life insurance is available for those over 50 who have been denied cover elsewhere. These types of policies usually don't require medical questions or health exams that standard policies do.

 

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Other factors that can affect premium rates

It's not just age and health problems that can affect premiums. The type of cover you buy could play a large part in the cost of your policy. There are two main types of life insurance:

  • Term life insurance: This can provide cover for a specified period of time, usually between 10-30 years. The cost is usually cheaper than whole life insurance and premiums remain fixed throughout the term. Despite this, the policy only pays out if you die within the agreed term.*

  • Whole life insurance: Can provide lifelong cover and often includes an investment element. As this type of policy covers you for life, it is typically more expensive than term life insurance policies. But your premiums and pay out value are fixed throughout.*

*The cost of premiums is typically fixed unless you choose an ‘increasing policy’.

 

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It's not just age and health problems that can affect premiums. The type of cover you buy could play a large part in the cost of your policy. There are two main types of life insurance:

  • Term life insurance: This can provide cover for a specified period of time, usually between 10-30 years. The cost is usually cheaper than whole life insurance and premiums remain fixed throughout the term. Despite this, the policy only pays out if you die within the agreed term.*

  • Whole life insurance: Can provide lifelong cover and often includes an investment element. As this type of policy covers you for life, it is typically more expensive than term life insurance policies. But your premiums and pay out value are fixed throughout.*

*The cost of premiums is typically fixed unless you choose an ‘increasing policy’.

Other factors can also have an impact such as:

  • The amount of cover required - Naturally, the more cover you want, the higher your monthly premiums could be. So it's best to take out the right amount of cover so that you don't over-insure. See - How much life insurance do I need?

  • Smoker status - Smokers typically pay higher premiums than non-smokers as they are considered to be at greater risk of death. You may be able to lower your premiums once you've stayed smoke-free for 12 months or more.

  • Family history - Insurers may also take into account any family medical history when calculating life insurance premiums. For example, if a family member has a history of cancer or heart disease, the risk of you developing the same condition is increased.

  • Lifestyle Habits - Those with hazardous hobbies such as skydiving or motor racing may be charged higher premiums, as they are deemed a greater risk of death.

Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.

 

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Tips to reduce your life insurance premiums

There are a few simple ways you can reduce the cost of your life insurance premiums:

Opt for term life insurance: As mentioned, term life insurance is usually cheaper than whole life insurance. However, you'll only receive a payout if you die within the agreed policy term.

Take out a joint policy:Joint life insurance can provide cover for two people within a single policy. As a result, it may work out cheaper than buying separate policies.

Quit smoking: Smokers typically pay higher premiums due to the increased risk of death. So quitting smoking may help to reduce costs.

Shop around: Comparing different insurers and policies can be a great way to ensure you get the best deal.

Help for when you need it most

We understand that searching for the right life insurance policy can be a daunting task. That's why we're here to help you every step of the way. We'll provide quotes from leading insurers based on your circumstances so that you can find a policy that fits your budget and needs. Get in touch today to see how we can help.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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