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In simple terms, a life insurance ‘premium’ is the sum of money you’ll pay each month in return for your cover.
You’ll need to keep up to date with your premium payments in order to keep your cover valid.
Upon your passing a ‘sum assured’ or ‘benefit amount’ will be paid out to your loved ones.
If you fail to keep up to date with your payments, your policy will become invalid, and your premium payments will be wasted.
To ensure you’re locking in an affordable life insurance premium, why not compare quotes through Reassured?
We work with a panel of some of the UK’s best life insurance providers to help you find the best available deal we can offer.
Our FCA-regulated service can provide you with personalised, fee-free and no-obligation quotes.
Watch our short video on life insurance premiums and how they are calculated:
Life insurance premiums through Reassured start from just 20p-a-day † although the exact price you pay will be influenced by key factors such as:
The cost of your life insurance premium is calculated using statistical analysis and mathematical equations carried out by underwriters.
The factors that affect the cost of your life insurance premium can be broken down into two categories:
If a high-risk factor is identified, insurers may increase the price of premiums to compensate for the heightened risk.
This is often referred to as premiums being loaded or hiked.
Every insurer uses a slightly different methodology, which is why it’s so important to compare multiple quotes as prices can vary significantly.
Keep reading as we look into these factors in greater detail and explain how they affect the price that you pay for your life insurance…
Term life insurance premiums are calculated using key information, including:
These factors help insurers to determine the level of risk involved with offering you cover, and your premium will be calculated accordingly.
The table below shows example quotes for both level and decreasing term life insurance.
Quotes are based on a non-smoker who is in good health for £100,000 of cover over a 20-year policy term:
|Age||Level term premium price per month||Decreasing term premium price per month|
Decreasing term life insurance often has the cheapest premiums as your risk to the insurer decreases each year as your sum assured reduces.
Compare both level and decreasing term life insurance using the services of Reassured to find the right policy to meet your needs at the best available price.
For more information we have created this in-depth average cost of life insurance UK guide which draws on extensive internal research from 142,576 term policies sold.
Again, whole of life insurance premiums are calculated using key criteria (outlined in this article).
Due to cover lasting for the remainder of your life and a pay out being guaranteed, premiums for whole of life insurance tend to be more expensive.
The table below shows example quotes for a whole of life insurance policy.
Quotes are based on a non-smoker, who is in good health for £50,000 of cover:
|Age||Premium price per month|
While premiums tend to be cheaper at a younger age, if paying this price for the rest of your life, it could become very costly.
For this reason, whole of life insurance can be better suited to those later on in life who want to guarantee an inheritance for their loved ones.
Why not let Reassured help you to compare multiple whole of life insurance quotes to find our most affordable premium price?
With so many factors to disclose during the application process, it could be tempting to falsify or withhold information in the hope of securing a more favourable premium.
However, this can prevent a pay out being made to your loved ones when the time comes. Meaning your selfless investment would be wasted.
Failing to provide the truth on your life insurance application is known as non-disclosure. Not only can non-disclosure invalidate your policy but it’s also a form of insurance fraud.
Insurers are used to applicants from all walks of life, so don’t feel ashamed to provide certain details. Honesty is always the best policy.
If you cancel your life insurance policy within 30 days, most providers will offer a full refund of any premiums paid into the policy.
This is known as a ‘cooling off period’.
Cancelling a policy at any point after the initial cooling off period won’t result in a refund of any kind.
Please note: cancellation policies will vary between providers so, when taking out a policy, it’s important to familiarise yourself with the full terms and conditions.
Unfortunately, no. The premiums paid for a personal life insurance plan won’t be tax deductible.
However, if you own a business, you may be eligible to take out business life insurance policies such as keyman insurance and relevant life insurance.
These are policies that benefit the business and, therefore, the premiums paid can be classed as a business expense making them tax deductible.
If you’re a business owner, you can check out our complete is life insurance an allowable business expense? guide to find out more.
Comparing quotes is essential in finding the most affordable life insurance premium.
Using the award-winning services of Reassured will allow you to compare quotes from multiple providers as well as compare multiple policy types.
We’ll do our best to help you find the right price for the policy of your choice.
A friendly member of the team can also help you through the entire application process and answer any questions you may have.
Why not seize the day and save time and money by comparing quotes through Reassured? Premiums start from just 20p-a-day.
Are life insurance premiums paid monthly?
Yes, you’ll pay your life insurance premium on a monthly basis.
It can sometimes be possible to pay your premiums on a yearly or quarterly basis but not all providers will offer this option.
What happens if you don’t pay life insurance premiums?
If you fail to keep up with your monthly life insurance payments, then your cover will become invalid. This means that when you pass away, a pay out won’t be made to your loved ones.
If you fall on hard times and find yourself struggling with your monthly payments, there are some alternatives to cancelling your policy.
How long do you pay premiums for whole of life insurance?
As cover lasts for life with a whole of life insurance policy, you’ll need to pay premiums for the remainder of your life.
However, there is usually an upper age limit written into the terms and conditions of a whole of life insurance policy.
This means, at the specified age, you’ll no longer be required to pay premiums but your cover will remain in place.
This is most commonly around 80 years old but this age can vary between providers.
Do I get money back if I cancel my life insurance?
You typically won’t receive any money back if you cancel your life insurance policy unless your provider offers a 30-day cooling off period.
This means if you cancel within 30 days of the start date of your policy, you’ll be refunded any premiums you’ve paid.
Do life insurance premiums increase with age?
Yes, the price you pay for life insurance will increase as you get older.
The longer you put off taking out cover, the more you’re likely to pay for your premiums.
Taking out life insurance as a young adult (and while you’re in good health) can help you to lock in the cheapest premium possible throughout the lifetime of your policy.
Why not seize the day and compare quotes through Reassured?
Can someone else pay my life insurance premiums?
It’s possible for a life insurance policy to be bought for another person if insurable interest (the policyholder’s passing would result in some sort of financial loss) can be proved.
Can you pay life insurance premiums in advance?
Advance premiums or pre-paid premiums do exist, however, these are more common with other insurance products and it’s unlikely to find these premium types offered with a life insurance policy.
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