The factors that affect the price you pay for your life insurance may seem obvious, but then again, you'd be surprised by how many of us rant and rave about the cost of our policies. And it's entirely understandable.
Why is it that some of us pay so much more than others for our cover? The uncomfortable truth is that, statistically, being a trapeze artist puts you more at risk of death than an office worker, smoking 600 cigarettes a week might end your life sooner than somebody else who abstains, and by taking out a policy for 25 years at the age of 20 you are more likely to survive the term than if you do so at the age of 50.
Now I say "might" because it's never certain, is it? You could be a Padded Cell Tester, trim, healthy, teetotal, and only just 20 – but you could still be walking along and be crushed in a freak accident involving a grand piano falling from a great height.
Life insurance, however, has to work with statistics and probability. So try not to take offence if the cost of your life insurance is more. Here, we try to explain why.
If you need to be covered for £100,000, you will pay more than if you needed to be covered for £50,000. Which makes sense doesn't it? Similarly, the longer you need to be covered for, the more you will pay.
If you'd like to read more on how life insurance can protect your loved ones, please read our tip Get a life (insurance policy)!
Hot off the press: the younger you are, statistically, the longer you've probably got left to live!
In all seriousness, taking out life insurance at a younger age is generally cheaper (of course, you should still shop around to make sure you are getting the best price, by doing a like-for-like comparison).
The problem is, the younger you are, the less likely you are to think about life insurance.
But the need for life insurance for younger people is arguably the greatest it will ever be, when your debts are likely to be highest, and with a young family to protect.
It can be a very delicate issue, weight. We know that as a nation we're getting bigger, and that there are health implications that come with being overweight. Life insurers know this too, so depending on your weight, they may charge you more.
We all know that things such as heavy drinking, smoking or taking illegal drugs can negatively affect our health. This increases the chance that your life insurer will have to pay out.
Increased chance of a pay-out means an increased price. However, lifestyle, in contrast to age, can be changed. For instance, if you give up smoking, 12 months later you are considered a non-smoker for life insurance purposes. So if you've given up smoking for over a year, you should review your policy arrangements, as you may find that the price will drop significantly.
But bad habits aren't the only lifestyle factors that life insurers take into account. If you have a hazardous pastime (for example, potholing, paragliding, underwater escapology and the like), this understandably is considered more of a risk than if you enjoy the odd recreational game of draughts.
If the nature of your work or your lifestyle takes you abroad to exotic or unstable locations, you may find the cost of your cover increases, or that you may be declined cover altogether.
Your job can really push up the amount you pay for your life cover. It's pretty self-evident that some trades and professions are more risky than others; if you're a steeplejack or a snake charmer, you can be certain you'll pay more than an office worker.
However, something you may not have considered is that certain aspects of your job, such as spending a large proportion of your working day driving, can also bump the cost up.
Most life insurance policies are medically underwritten. This means some questions about your medical history, and also the medical history of your immediate relatives, will have to be answered. Depending on the answers you give, your life insurer may decide to increase your premium, or exclude claims relating to a certain condition.
Due to the complex nature of this element of underwriting, it is impossible to give an accurate quotation, so if you have a particular condition, be prepared for the cost to be higher than that given initially.
When it comes to any kind of insurance, being totally honest is the only policy. Neglecting to declare that you like to go deep sea diving, for instance, could well mean that your insurance doesn't pay out if you die in a diving accident. This is doubly pointless and upsetting; not only will your insurance not pay out to those you leave behind, but you will also have been paying money each month for a worthless insurance policy!
The moral of the tale is that you might not like the price you get quoted, but, failing shopping around, there's little you can do to change it, so don't be inclined to be anything other than completely truthful when applying for cover.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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