Certain aspects of a person’s lifestyle or medical history may substantially reduce their life expectancy and therefore increase their life insurance premiums.

One of the main factors affecting life insurance premiums is age, the older the individual the higher the premium. Although many in their early twenties may not yet have dependents for whom they need to provide in the event of their death, they are still encouraged to take out life insurance, because the premiums will be less expensive and remain cheaper for the rest of their lives or the term of the insurance.

Many insurance companies require that people have a thorough medical examination, including tests for blood pressure and cholesterol, before taking out a life insurance policy. Lifestyle has an impact on life insurance premiums, therefore participating regularly in dangerous sports or having a job that is considered dangerous results in increased premiums. Certain activities may be excluded from a policy and if the policyholder were to die whilst taking part in such an activity, the sum assured would not be paid out. Smokers and men pay higher premiums, because statistically, women live for longer.

Some people may be tempted to withhold certain information that they believe will increase their life insurance premiums, but if it is discovered after their death then the insurance company can refuse to pay out.
 
Critical Illness cover can be added to an insurance plan and the sum assured would be paid out should the policyholder be diagnosed with a qualifying critical illness. Depending on the individual’s medical history, some illnesses may be excluded from the policy. 

If you have decided to take out a life insurance policy, how do you know which is the best and the most suitable one to choose? Ideally, you should speak to a professional insurer or broker that is regulated by the FSA before you even begin to make an informed choice.  You can then discuss the different types of policy available and make a fully informed decision. 

Term insurance is the simplest and cheapest form, and will pay out only if you die within the agreed term.  This term could be anything from 10 to 30 years or even longer. The types of payment to any if you die beneficiary can also vary; the policy could pay a lump sum, which will include any bonuses accrued during the term, or a family income, which will split the sum into regular income payments.  Decreasing and renewable policies are also available, whereby you could either increase or reduce the length and term of your policy. This type of life insurance policy is often linked in with a mortgage.

You may feel it is more prudent to take up a whole of life insurance policy, ie one that will cover your family or dependants whenever you die; these tend to be the more expensive option.  Your insurer will always take other factors into consideration before a policy is agreed upon, such as the type of job you do and whether or not you are a smoker.  A racing driver’s premiums will naturally be higher than a librarian’s, simply because of the more dangerous nature of their occupation, and men tend to pay a slightly higher premium, as on average women live longer.

Life Insurance premiums vary between different insurance companies and according to the situation and lifestyle of the person being insured.

In general the older a person is when they take out life insurance, the more expensive their premiums will be.  Moreover, the premiums could increase as a person gets older, which is something to be aware of when the policy begins.  Level term assurance is an option that ensures your premiums are fixed from the start of the policy; however, the amount paid out may decrease with deflation.

Your general health will have an effect on the cost of insurance.  Those with pre-existing medical conditions may be denied health insurance completely, or may be expected to pay higher premiums.  Alternatively, an insurer may exclude one particular condition from the policy so that if the person dies due to that condition nothing will be paid out.  Before taking out life insurance ensure that you understand exactly which conditions you are covered for.

People who are in a dangerous line of work will have higher insurance premiums.  Those who regularly partake in high-risk activities such as extreme sports may require extra levels of cover.  Dangerous activities are often excluded from general policies, and anyone who expects to participate in extreme sports should consider taking out a specialist insurance policy.  Other exclusions included drink or drug related deaths; in any of these cases the insurer is unlikely to pay out.  It is important to be aware of and understand all exclusions on your insurance policy.

Before buying insurance think about what exactly you require from your policy in order to be sufficiently covered, and do not be tempted to settle for a policy simply because it is cheap, since it may not provide you with adequate cover.

Nobody wants to pass away unexpectedly leaving their family members and dependents without financial support and leaving plans unfulfilled.  Unfortunately, this is not a rare occurrence, particularly among those with health problems, and those whose lives involve dangerous activities.  Life insurance is a means to alleviate some of these concerns.

The premise of life insurance is that the insured person is insured against death.  This means that in the case of their death, the insurance company to the bereaved will release an agreed-upon amount of money.  This sum of money acts as a substitute for the lost earning power of the insured party, enabling the bereaved dependents to continue life, and to pay for immediate, unplanned expenses such as funeral costs.

With the population ageing, for more and more people it makes good financial sense to invest in a life insurance policy.  Due to increased life expectancies, these days more time is spent in retirement relative to time spent in the workforce, when compared to previous generations.  Therefore, the prospect of providing extra income for the family after passing away is becoming increasingly attractive.  Look for policies that compensate for inflation, since this maintains the real value of your life insurance policy for the longest possible time.  Such policies are known as ‘inflation linked assurances’, and ensure that no matter when the insurance is called upon, a significant sum will be paid out.

Every parent wants to do the best for their children.  No one likes to think that they would not be around to see them grow up, but the sad fact is that every year, many families that go through the experience of losing a parent.  It is not nice to think about it, but this reality does present an excellent argument for making sure you get life insurance if you have children of your own.

The purpose of life insurance is simple: if you should die while the policy is in force, it will pay out a lump sum to the beneficiary of the policy.  This means that the remaining parent could receive a sum to help them continue bringing up the children in the best possible way.  This sum can prevent the remaining parent from struggling to pay the mortgage on the family home and other living expenses.  If you are in a single parent family, it can also provide protection for your children in accordance with your will.

Life insurance is something that some people do not like to think about.  This is understandable, but if you do have children, it makes perfect sense to take out such a policy as soon as you possibly can.  You can opt for term assurance to last for a specific length of time, or simply get standard whole-of-life insurance to last until you die.  Either way, it will protect the family you love if anything should happen to you.

As with all types of insurance, there are many factors to consider when choosing your life insurance policy.  One of the most important is to choose a reputable insurance provider and check that the Financial Services Authority regulates your policy.

It is tempting to choose the cheapest policy available; however, cheapest is not always best.  A cheap policy might not cover everything you need, which effectively makes it useless and a waste of money.  It is vital to select a policy that provides you with sufficient cover, even if it may be more expensive.

It is best to take out life insurance when you are in the best possible health, as fewer health problems will mean your policy will be cheaper.  If you have a partner and are both in good health, it can be more cost-effective to take out a joint policy.

The main reason most people take out life insurance is to cover their mortgage in the event of their death.  However, there are other debts to consider, such as credit cards and personal loans.  Therefore it is advisable to choose a life insurance policy which covers all those debts, as well as a mortgage.

It is beneficial to review your life insurance regularly, in case any details have changed and to be sure you have adequate cover.  Your insurance provider will need to know of any significant life changes, such as having a child, changing jobs or getting married.

As with all types of insurance, there are a number of ways to reduce the cost of your initial insurance quote.  The first place to start is by obtaining a number of quotations, either from contacting individual insurance providers directly, by visiting an insurance comparison website, or by contacting an insurance adviser.  By comparing several quotes, you will be able to choose the best price.  It may also be possible to contact your existing or preferred insurance provider and ask them to match the lowest quote you have found.

Life insurance is essential when you take out a mortgage and the mortgage lender will most likely offer you their life cover.  However, this may not be the most cost effective option for you and you are not obliged to accept the policy provided by your mortgage lender. 

Another way to reduce costs is to take out a joint policy with your partner.  This is a viable option if you are both in similar health; however, if you have quite different medical circumstances then it would makes more sense to have separate life insurance.

The simplest way to reduce the cost of your life insurance is to improve your health as much as possible.  It may not be possible to change existing medical conditions however you can improve your overall health by maintaining a healthy weight, reducing alcohol intake, taking regular exercise and quitting smoking if applicable.

Always remember that the cheapest quote is not necessarily the best option, as you need to be certain you have appropriate cover.

There is a significant difference between life insurance and health insurance that may not be clear at first glance.  When choosing a health or life insurance policy it is very important to know the difference and read the policy documents to ensure you know exactly what you are getting.

Health Insurance

Health insurance is designed to help with the cost of medical treatment and provides access quickly to good quality treatment in the event that the policyholder becomes ill.  It may offer full cover or partial cover for certain conditions, depending on the price paid and the medical history of the policyholder.  Health insurance can provide cover for many conditions that are expensive to treat, or can provide speedy access to expertise or excellent facilities should a policyholder require treatment.

Life Insurance

Life insurance is designed to ensure that if a policyholder dies unexpectedly, their loved ones and beneficiaries are financially secure and are not placed in undue financial hardship.

There are two main types of life insurance: term life insurance and whole life insurance.  Term life insurance is a simpler and less expensive policy that provides insurance for a set period of time with no financial return at the end.  Whole life insurance is a life insurance policy and an investment scheme whereby part of the premium is invested into some type of asset portfolio such as a mutual fund or shares.  These are usually more expensive and often it is more economical to have a separate life insurance policy and unrelated managed investment portfolio.

While experts recommend investing in life insurance as early as possible, it simply is not always possible.  Sometimes, people are not in a financial situation to pay into life insurance at a young age and they start a policy when they are older.  It is still important to buy life insurance, even if it is impossible to start paying into a policy early.  Life insurance provides a lump sum to the policy holder’s beneficiaries in the case of the policy holder’s death.

Final costs can add up fairly quickly, especially when funeral costs, burial costs and remaining debts are taken into account.  These costs are taken out of the lump sum given to beneficiaries.  In the case that medical problems lead to death, there may also be medical expenses that need to be paid.  Therefore, it is very important for someone who is buying life insurance at an older age to have enough coverage.  Ideally, the coverage amount should be enough to pay off final costs and debts as well as provide for any beneficiaries.  In many cases, the policy holder is the sole provider for a family that will have ongoing expenses after the policy holder’s death.  If there are no other providers in the family, the policy holder may want to have a larger policy to help with ongoing costs.

Although purchasing life insurance at an older age can be more expensive than it is for younger people, it is a worthwhile investment.  It can help people with end-of-life costs, as well as ongoing expenses for their families.

The person who purchases a life insurance policy enters into a contract with the insurer of that policy.  A common question is, do I need a life insurance policy?  Nobody will be able to answer that question for you.  You need to evaluate your situation in order to obtain the answer.  If you have young children that are financially dependent on you, then it would be wise to insure yourself so that your family is secure in case of your death.  If you have purchased an insurance policy and something untoward happens to you, then a specified amount of money will be paid to the nominated person.  Any person or a family member can be nominated as the beneficiary of the insurance policy.

Term Life Insurance

Term life insurance is also called term insurance.  Under term life insurance, the insurance cover is provided for a specific period of time, or term, such as one, five, ten, or 15 years.

Universal Life Insurance

A universal life insurance policy allows you to control the premium amount and where the insurance company can invest it.  The insurance company may be instructed to invest in bonds, shares, or mutual funds so that you can take advantage of interest rates in the market.

Whole Life Insurance

Whole life insurance provides an insurance cover for the entire duration of your life.  Upon your demise the beneficiary is paid the amount that you are insured for.