If you’ve started looking at life insurance and been surprised by the price, you’re not alone. A lot of people expect it to cost much less than it does, and when you get your first quote, it can feel frustrating or even unfair.
There’s usually a clear reason behind the price. Life insurance isn’t priced at random. Providers look at how likely they are to pay out on a policy, and they base your quote on that risk. The higher the perceived risk, the higher the premium tends to be.
The good news is that in many cases, there are simple ways to bring the cost down without giving up the protection your family needs. Let’s look at some of the main reasons your quotes may be higher than expected.
Why quotes can vary
Different insurance companies assess risk in different ways. One provider might be happy with your medical history, while another might charge a higher price.
Just as home insurance will evaluate the risk of damage or theft based on your location and security levels, life insurance premiums hinge on several key personal factors.
That’s why two people with similar backgrounds can get completely different quotes.
This is also why comparing insurers through a broker often uncovers better prices than going directly to a single company.
Your age matters more than you think
The younger you are when you apply, the cheaper your policy usually is. As we get older, the risk of health issues increases, so insurers tend to raise prices the longer you leave it.
If you’ve taken out cover later in life, the cost is naturally higher than it would have been a few years earlier. For example, the premiums will be higher for someone applying for cover in their 40s than it will be for someone in their 20s.
There are a few policies that offer fixed premiums, such as whole of life insurance and level term life insurance. What this means is that your premiums stay the same as you age, which can be beneficial if you take out cover when you’re younger.
Health and medical history
Insurers look closely at your health when you apply. Things like diabetes, heart problems, high blood pressure, or previous serious illness can push premiums up.
They don’t just look at your current health either. Family medical history can also play a part, even if you feel perfectly well right now.
A family history of cancer or heart disease, for example, can influence your premium plans as insurers will consider the potential for hereditary health issues to develop over time.
If your policy includes critical illness cover, this can also make the overall cost noticeably higher.
Smoking and lifestyle habits
Smokers pay more for life insurance. That’s simply how the industry works. Vaping, heavy drinking, high-risk hobbies and dangerous occupations can all increase the price.
From an insurer’s point of view, these aspects raise the chance of a claim, so the premium follows.
Even occasional smoking or use of nicotine products can affect what you pay. Some insurers may be willing to reduce your cover if you quit smoking for a certain period, usually around 12 months.
The amount of cover you chose
It goes without saying, the more cover you want to take out, the more you’ll pay in premiums.
If you’ve insured a large mortgage, high household income or have a family to look after, your premiums will most likely reflect that.
Sometimes people accidentally overestimate what they need and end up paying for more cover than is really necessary. That doesn’t mean you should under-insure yourself, but it’s worth checking if the balance is right.
The type and length of policy
There are two main types of life insurance cover to choose from. Whole life insurance, which lasts your entire lifetime, and term life insurance, which provides cover for a specified period.
Whole cover costs more than term because it’s guaranteed to pay out eventually.
Longer policy terms also cost more than shorter ones. A 30-year policy will normally cost more than a 15-year policy, simply because the insurer is at risk for longer.
Adding extras like critical illness or waiver of premium can also increase the cost of your premiums.
If you and your partner share financial responsibilities, it may make sense to take out a joint life insurance policy. This covers two people under one policy and pays out either when one of you dies or both. It can often work out cheaper than taking out separate policies.
How can you reduce the cost of your premiums?
In many cases, there are ways you can reduce your premiums. It may be a case of limiting the amount of cover, or switching to a more affordable policy.
Before you take out a policy, be sure to:
- Review how much cover you actually need
- Check the policy length is realistic
- Compare insurers instead of accepting the first quote
- Look at whether extras like critical illness cover are essential for you
- Consider taking out a joint policy
Remember, you don’t always need the most expensive policy to get solid protection.
Life insurance should protect your finances, not strain them
If life insurance feels unaffordable, it’s usually not because you’re doing something wrong. It’s normally down to how the policy was structured in the first place.
A well-matched policy should feel manageable month to month and still give your family real protection if it’s ever needed. So, if your current quote feels too high, it doesn’t mean life insurance isn’t for you. It often just means the policy needs adjusting.