How life insurance rates are determined - ditching this habit may help lower policy price
LIFE insurance rates will vary from person to person, due to the price a policyholder pays depending on their personal circumstances. How are life insurance rates determined?
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For those with children or dependent relatives, life insurance may provide peace of mind for a person. A policy could mean that should the undesirable happen, one’s family will have some financial support in place. It may be that a person is required to take out a life insurance policy, such as as part of their mortgage agreement. Whatever the reason for getting life insurance may be, the amount that a person pays will depend on their circumstances.
The younger you are and the less likely you’re to die from a medical condition, the cheaper your policy is likely to be
Factors such as age, health, and lifestyle choices, for instance, may play a part in how much one is charged for their premiums.
The Money Advice Service warns policyholders to “check exactly what is covered for the level of the monthly payment”.
It also states some of the factors which may affect how much a person pays per month.
This includes age, health, lifestyle, whether the individual smokes, the length of the policy, and the amount of money that one wants to cover.
“For example, the younger you are and the less likely you’re to die from a medical condition, the cheaper your policy is likely to be,” the website advises.
It may be that making some lifestyle changes, or taking out a policy during one’s younger years could be of benefit, according to the price comparison website.
Quit smoking
According to MoneySuperMarket research, smokers can pay 50 per cent more for their life insurance.
In fact, smokers can pay around £152.76 more per year - meaning ditching the habit could help some people save cash.
Get insurance young
As a person ages, their life insurance premium rates may increase.
Getting insurance at a younger age may mean the policy is cheaper than it would be in years to come.
However, it could be worth checking that the premiums won’t increase each year.
Check for current cover
It may be that a person is already covered by a life insurance policy, but hadn’t realised.
This could come alongside a mortgage or with a job, so it may well be worth double-checking prior to taking out another policy.
READ MORE: Life insurance UK: Money expert warns consumers to NEVER do this after changes in health