Premiums: How Much Does Life Assurance Cost?

Life assurance is undoubtedly more expensive than plain life insurance. The amount of premiums will depend on several factors:

  • Type of cover.

    Will you be getting a whole life policy or an endowment policy? An endowment is more expensive since it will pay a lump sum at the maturity date. Also, it depends on what type of benefit you want – a lump sum or an income benefit.

  • The amount of cover.

    The sum assured is a key determinant to premiums. Of course, the higher the sum assured, the higher the premiums. You may need to have a combination of life insurance and life assurance to provide you and your family with what you need.

  • The insured’s age.

    The older the insured, the more expensive the premiums. This is because as we age, we become more susceptible to disease, especially chronic illnesses.

  • The insured’s gender.

    According to statistical experience, males are more susceptible to illness than females.

  • The insured’s smoking habit.

    Smoking leads to a host of health problems and as such, smokers are given a higher premium rating. Those who have smoked in the past but have already stopped should prove that they have not been smoking for the past 12 months.

  • The insured’s medical condition and history.

    The health condition of the insured has great bearing on the risk carried by the insurance company on the life of the insured. That is why for most life assurance policies (except for group life assurance), medical underwriting is exercised. This will determine whether a person has a higher than normal risk of dying due to illness.

  • The insured’s occupation and lifestyle.

    These also indicate the level of risk a person has. There are some occupations that are considered more dangerous than others (i.e. firemen, racecar drivers, pilots, scuba diving instructors, etc.). Also, one’s lifestyle may show a propensity towards risky sports (i.e. bungee jumping, sky diving, paragliding, etc.).

  • The length of cover.

    Premiums are usually lower for policies that have longer coverage.  This is particularly true for endowment policies, since the shorter the coverage period, the shorter the time it takes for the fund to reach the guaranteed endowment amount by the time the policy matures.

  • The number of persons covered.

    There are single life policies and joint life policies and of course, the premiums will be higher the more persons are covered in a policy.

The insurance company will look at all these factors to determine the premium rating to assign to your life assurance policy.

To protect your loved ones for less, fill the form on the right to get your life insurance quote.