What Influences UK Life Insurance Premiums?

Even people who know they need life insurance may not understand how it works.

Deciphering the different types of life insurance available in the UK is a feat in itself.

When it comes to premiums, many consumers cannot distinguish a good rate from a bad one because they do not know what these quotes are based upon. Understanding what affects a life insurance premium is essential to ensuring that you are getting the best deal.

Term Vs. Whole Life

Type of policy is one factor that influences life insurance premiums. Term life insurance is less expensive because it covers a stated period while whole life is permanent (though a whole life policy may have a cash-out option).

If the cover period of a term life policy expires and the policyholder is still alive, nothing is paid out. Term life is typically used to cover the balance of a mortgage should the individual die while the policy is in force.

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A whole life policy is considered an investment and the policyholder can build up cash value by drawing an income. By choosing a whole life policy with a level premium, an individual can make this cover more affordable.

The premium remains the same for the duration of the policy, while the premium for a term life policy increases over time. A whole life policy featuring a level premium is easy to budget for and will pay beneficiaries a lump sum when the policyholder dies.


Age is another factor that affects premiums for life cover because the older a person is, the more likely he or she is to die in the near future. Even a five or ten-year term life policy can be very expensive if the applicant is over 50.

Many insurance providers make this cover more affordable by offering special, guaranteed issue policies for individuals over age 50 or 55. As long as the individual answers several questions in the desired way, the cover is provided without a medical.

Smoking is known to shorten the lifespan so insurance providers charge smokers more for life insurance. Giving up smoking  12 months before applying for life insurance cover is not only a healthy practice, it also can help people save money on this cover. Other lifestyle factors that can affect life premiums include heavy drinking and taking illegal drugs.

Weight is a delicate issue and it has many health implications. Life insurance providers are aware of these and may charge more if an applicant is overweight by a certain amount, giving people another reason to diet.

Individuals with chronic medical conditions cannot do anything to avoid the high premiums they may face for life cover. The best they can do is visit their doctors regularly and follow professional advice to stay as healthy as possible.

Hazardous hobbies such as paragliding and potholing make an individual risky to insure and even regular travel to unstable or exotic countries can increase life premiums. Occupation is another factor that may result in higher life premiums, with office workers paying less than people who spend large portions of their workdays driving.

One thing that can no longer affect life premiums is gender, thanks to a ruling by the European Court of Justice that became effective in December 2013.