How Much Does Whole Life Insurance Cost?

Whole life insurance offers a ton of benefits for those looking for long-term protection. That said, it can often be more expensive than other types of cover, such as term life insurance. As cost is a concern for many of us, we'll break down some of the reasons that affect the cost of cover and what you can do to reduce your potential premiums.

In this article we'll help to answer:
 

• What Is Whole Life Insurance and how does it work?
   

• How much does Whole Life Insurance cost on average?
   

• Why is whole life insurance more expensive than term?
   

• What factors affect the cost of Whole Life Insurance?
   

• Is Whole Life Insurance worth the cost?
   

• How to lower the cost of Whole Life Insurance

How much does Whole Life Insurance cost on average?

Two of the biggest influences on the cost of life insurance are your age and health.

For example, a 25-year-old in generally good health with no issues could expect to pay less than a person in their late 40s with a pre-existing condition could expect to pay around.

When you apply for a quote, you'll be asked some questions about your age, health history, lifestyle choices (such as smoking or drinking), and any relevant family medical histories. Insurers use this information to assess your risk level and determine your premium.

Not sure how much whole life insurance could cost you? Use our free online quote service for an estimate. We can provide you with low-cost life insurance quotes in a matter of minutes.

Why is whole life insurance more expensive than term?

Whole life insurance tends to be more expensive than term life insurance for a few reasons.

The main being that whole life cover lasts indefinitely, whereas term only lasts for a set period of time. This means that a payout will be all but guaranteed, so insurers will tend to charge more for cover.

Term life insurance will only pay out if you die within the agreed policy term, if not the policy expires. Whereas with whole cover, the policy will payout if you die at any time, whether 5 years from now or 50. All you have to do is make sure your premiums, and as long as a claim is successful, your family will receive a cash lump sum.

What factors affect the cost of Whole Life Insurance?

As mentioned earlier, several factors play a significant role in determining the cost of whole life insurance. Here are some of the main contributors:

Age

Your age at the time when you apply is one of the most influential factors affecting your premium. Younger people generally pay lower premiums since they are considered lower risk. As you age, the risk of death and the insurer making a payout increases, which results in higher premiums.

Health

Insurers will typically require a medical exam or health questionnaire to evaluate your current health status. Pre-existing conditions, chronic illnesses, or a family history of health problems can all raise your premiums.

Smoking status

If you smoke or use tobacco products (including vaping), you can expect to pay higher premiums. As smoking can negatively affect your health, insurers often classify smokers as higher-risk customers.

Some insurers may also require longer waiting periods or additional health disclosures during the application process, which can further influence costs.

See our guide on 'life insurance for smokers' for more information.

Cover amount

The amount of coverage you choose directly impacts your premium. Generally speaking, the more cover you choose to take out, the higher your monthly premium will be. That's why it's important to correctly determine how much cover is needed so that you aren't paying for more than what is necessary.

See: ‘How much life Insurance do I need' for more information.

Occupation

Some insurers could charge more for cover if you work in an occupation deemed hazardous. For example, jobs in construction or mining may be viewed as higher risk due to the potential dangers involved. Whereas, those in lower-risk professions, such as administrative roles, could benefit from lower premiums.

Lifestyle Choices

Your lifestyle choices can also impact your life insurance premiums, especially factors like diet, exercise routine, and hobbies. For example, individuals who engage in dangerous activities may face higher premiums.

It's essential to be honest about yourself during the application process since any omissions could lead to claim denials later on.

Is Whole Life Insurance worth the cost?

If you're not sure what type of life plan you need, it's worth noting that whole life insurance offers unique benefits that may justify its higher cost compared to term. However, it also depends on your personal circumstances.

For example, if you're a young family, whole life insurance could help to provide financial security for your loved ones in the event of your death. The guaranteed death benefit ensures that your beneficiaries receive a payout, which can cover expenses such as mortgages, education, or daily living costs.

This long-term financial protection can be essential for parents looking to safeguard their family's future.

However, if you only wish to be covered for a certain time such as until your children are grown or your mortgage is paid off, then term life insurance may be a better option.

If you're not sure which is right for you see our guide on whole vs term life insurance.

How to lower the cost of Whole Life Insurance

If cost is a concern for you, there's a few ways you could potentially lower your monthly premiums:

1. Get covered early - as premiums tend to be cheaper when you are younger, buying cover early could save you money in the long run. Whole cover has fixed premiums so the amount you pay stays the same during the policy's lifespan.
    
2. Work out how much cover you need - Buying more coverage than necessary can lead to higher monthly payments. Assess your financial situation, including debts, ongoing expenses, and future financial commitments.
    
3. Maintain a healthy lifestyle - Keeping fit and avoiding high-risk activities could lead to lower premiums including non-smokers or those who regularly exercise. Consider taking steps to improve your health and maintaining a balanced diet.
    
4. Consider getting a joint policy - Joint life insurance protects two people under one policy and could be more affordable than taking out separate policies.
    
5. Shop around for rates - Not all insurers offer the same rates. Take the time to compare quotes from different insurers to find the best quotes.

Cavendish Online is committed to helping customers find the lowest possible premiums for life insurance and other protection products.

When you buy with one of our advisers, we’ll automatically place you on an annual review scheme. We’ll get in touch every year to check that your policy is still adequate, and look into alternatives if it’s not. Contact our expert advisers today to get started.