Term Life Insurance Rate

Assessing the factors which determine the cost of your life insurance

The term life insurance rate you pay depends on plenty of factors- your sex (women are better off), your health (and that of your immediate family) and above all whether you smoke. Smokers can expect up to 50% more expensive premiums.

Several factors will affect the term life insurance rate which you end up paying. However, think that’s all there is to the argument- each insurer places a different weighting onto each issue; that’s how they differentiate themselves in the marketplace.

The most obvious are factors concerning your health; and the number one issue is smoking. Smokers pay higher premiums than non-smokers because the risk of their dying earlier is far greater. Don’t think for one moment that you can claim to be a non-smoker when you do smoke- insurers routinely check after deaths from e.g. lung cancer or emphysema; and your policy will be invalidated. In general, ex-smokers get a pretty raw deal: once you’ve touched the dreaded weed you’re largely branded a smoker for at least a year later.

Similarly, your sex affects your term life insurance rate (although not as much as smoking!). Women generally live longer than men; so a level term insurance policy will usually incur lower premiums. Similarly, the rates for women for life assurance are also lower, as women usually have longer to reach a target investment than their male counterparts.

The other big issue is age: obviously there’s a greater chance of your dying at 65 than there is at 25; indeed most life insurers will not entertain applications beyond the age of 75 (there are exceptions to this rule- if you start early enough, ask your insurer about convertible and renewable policy options). If you do obtain cover, expect to pay a higher term life insurance rate the older you are.