How lifestyle and health impact the cost of life insurance

Published  27 July 2020
   6 min read

When it comes to life insurance, what you pay may be significantly different from your friends and family, even if you all have a policy with the same insurer.

So, what really goes into determining the level of your life insurance payments?

Factors affecting life insurance premiums

Does age affect life insurance costs

Your age when you apply for your cover will be a big factor in the cost of your policy. The older you are at the time of application, the higher your payments are likely to be.

It’s all a question of risk ‒ the older you are, the more likely it is that you will pass away during the term of your policy.


Weight and Its Effect on Insurance Rates

Your height-to-weight ratio is also a key indicator for an insurer. If you have a high BMI, then the higher the chances of you developing other health issues which could potentially shorten your life expectancy, for example, type two diabetes.

As a result, if you are overweight, your monthly payments may be more than if you were a healthy weight.

It goes both ways though ‒ there may be an impact on the pricing of your policy if your BMI is too low, since this can also cause health issues.


Medical History and Its Role in Insurance Pricing

Plenty of people develop health issues irrespective of their weight, from type one diabetes to asthma. But each of these issues could increase the likelihood of you passing away during the term of your policy, which means they will lead to a more costly premium.

It’s not just your own medical history that an insurer will want an insight into either; they will also ask you about your family’s medical history. It may be that while you have no signs of it currently, certain hereditary diseases are common within your family, which will have a knock-on effect on your pricing.


Does smoking affect life insurance

A significant factor in the price of your cover will be your smoking habits.

Smoking can lead to all sorts of health issues, from increasing the chances of getting a range of different cancers, to heart disease and strokes.

Insurers will ask you if you have used any nicotine or nicotine-replacement products in the last 12 months. If so, you are classed as being a smoker, and will most likely, face higher payments.

This means that if you are a smoker and manage to kick the habit successfully it will be worth discussing it with your insurer, or getting quotes for a new policy, as it may mean your monthly payments drop.


Drinking Habits and Life Insurance Costs

The insurer will also ask about your drinking habits. After all, excessive drinking can lead to certain health problems, particularly related to your liver. As a result, big drinkers may face increased life insurance payments.


Occupational Risks and Insurance Premiums

You might not expect your job to make much difference to your life insurance payment, but it is actually an important factor in determining the cost of your policy.

The thinking is pretty simple. Certain professions naturally bring a greater element of risk than others. For example, working in the Armed Forces is going to be more detrimental to your chances of reaching old age than working in an office.

As a result, if you have a riskier occupation, then your policy may cost more.


How Hobbies Can Affect Your Insurance Premium

How you spend your spare time may also have an impact on the cost of your cover.

If you spend your weekends playing cards then, it won’t make much difference. But if you’re into extreme sports, for example, skydiving, then don’t be surprised if your payment increases.


Determining Your Coverage Level

The more cover that you want from your policy, the higher your payments are going to be.

Ultimately, there are all sorts of considerations that go into working out what level of cover you want. For example, if you have a mortgage, then you will generally want the policy to ensure the remainder of the loan is paid off should you die.


Different Types of Life Insurance and Their Costs

Life insurance comes in a host of different forms. With a level term policy, the payout your loved ones will receive in the event that you pass away will be the same. This is irrespective of whether you die in the first or last year of the policy.

However, with a decreasing term policy the payout drops over time. This is the sort of policy which may appeal to those with a mortgage, as the payout lowers as the outstanding mortgage does.

Because the payout drops over time, decreasing term cover tends to be cheaper.

Ultimately, there are all sorts of considerations that go into working out what level of cover you want. For example, if you have a mortgage, then you will generally want the policy to ensure the remainder of the loan is paid off should you die.


Term Length and Its Influence on Premiums

How long you’re covered for will also impact the cost of your cover. The longer the term of your cover, the more expensive your payments will be. While most policies are taken out over a fixed term, perhaps 30 or 40 years, it is possible to get whole of life cover.

As the name suggests, this ensures your loved ones will get a payout no matter when you die. Because of this certainty of a payout, the payments will tend to be higher than with a fixed term policy.


John Fitzsimons has been writing about money for more than a decade, as editor of the B2B magazine Mortgage Solutions and then personal finance website loveMONEY. Since going freelance, he has written for the likes of the Sunday Times, Forbes, the Mirror, the Sun, and Moneywise.

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