The cost of life insurance is very low right now. Competition in the life insurance market and the fact that life insurance companies can save money by doing business on the Internet have pushed insurance rates down to levels that have never been seen before. Life insurance rates can be as low as GBP5 per month for a healthy non-smoker in their 20s.
But there are a lot of things that affect how much a person will pay for life insurance in the end. Everything from genetic diseases to diet will be taken into account, and depending on what we tell the insurance company, our rates could go up or down compared to the average rates for our age.
So, what will affect the rates that a life insurance company gives for life insurance? Here's a list of the most important things to think about:
Age: If you are younger, your life insurance rates will be lower; if you are older, they will be higher. In general, life insurance companies think that young people are less of a risk than older people. This is because the life company just thinks that from now on, young people will live longer than older people for a certain amount of time. Because of this, young people will pay more in monthly insurance payments before they die than older people will in the same amount of time.
This age bias may seem a little unfair if you're in your 40s or 50s and live a very active and healthy life. But a 25-year-old may have to make monthly payments for more than fifty years to reach age 75, while you would only have to make payments for twenty-five to thirty-five years to reach the same age. When you consider that the closer we get to our life expectancy limit, the more likely we are to die, which raises the risk that life insurance companies take on when they pay out, it is easy to see why life insurance rates go up as we get older.
Smoking: People who don't smoke pay less for life insurance than people who do. In fact, if a smoker quits and then gets life insurance, they could save up to 50% on their rates. If you want to stop smoking, you should check your life insurance policy first. Some insurers won't lower your rates if you stop smoking during the life of the policy, so you'll have to switch companies if you want to get non-smoker rates.
Pre-existing health conditions: Hereditary diseases, especially those that run in both sides of the family, can have a big effect on how much life insurance costs. Also, if you have to go to a medical exam and it turns out that your health is worse than the "average" for your age, your insurance rates are likely to go up.
