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How Much Does Life Insurance Costs

Life insurance is a crucial financial tool that provides a safety net for loved ones in the face of unforeseen circumstances. In this comprehensive guide, we will delve into the intricacies of life insurance pricing and explore the elements that influence costs, providing insights to help individuals make informed decisions about this essential financial investment.

The cost of life insurance depends on several factors, including your age, gender, overall health, the type and length of the policy, and the amount of coverage you purchase. The average cost of life insurance largely depends on your risk of mortality. This usually means that younger and healthier individuals pay lower rates. Typically, adult women are cheaper to insure as well, since they tend to have a longer life expectancy than adult men, according to the Centers for Disease Control (CDC).



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Determining the cost of life insurance involves a careful consideration of various factors, with one of the primary influences being the age of the policyholder. Typically, younger individuals are presented with more affordable premiums, as they are perceived to be at a lower risk of health issues and mortality. This age-based pricing strategy underscores the importance of securing life insurance early in life to lock in lower rates. 

Health status is equally crucial, with insurers conducting comprehensive medical underwriting to assess the applicant’s well-being. Those with pre-existing health conditions might face higher premiums, emphasising the significance of maintaining a healthy lifestyle and promptly addressing any health concerns. Additionally, lifestyle choices such as smoking, participation in hazardous activities, or having a risky occupation can also impact costs, as insurers factor in these elements when determining the level of risk associated with the policyholder.

The type of policy and coverage amount selected significantly influence the cost of life insurance. Term Life insurance, offering coverage for a specified term, generally comes with more budget-friendly premiums compared to permanent policies like Whole Life or Universal Life. The coverage amount, otherwise known as the ‘death benefit’, directly correlates with costs, with higher coverage translating to higher premiums. Striking a balance between the desired coverage and affordability is pivotal. 

Additionally, the duration of coverage needed, payment frequency, and the inclusion of policy riders can further affect costs. Ultimately, understanding these multifaceted factors allows individuals to make informed decisions when selecting a life insurance policy that aligns with their financial goals and provides peace of mind for their loved ones.

What factors impact your life insurance cost?

When considering coverage, you might wonder how much life insurance will be per month. The cost can vary widely. Life insurance providers assess several factors to determine coverage eligibility and to estimate premiums. Gaining an understanding of how life insurance providers price premiums can offer valuable insight into what your rate might be.

Life insurance rates are based on the risk appetite of the company paying out the death benefit. This means that anything that increases your risk of mortality will likely increase your rates. Through medical exams, health questionnaires, and other underwriting processes, insurance companies are able to determine how much of a risk you present. Always be honest when you fill out this information. If you lie about your health status, you run the risk of your policy being cancelled or your death benefits payout being denied when you pass away.

Here are some factors that determine your life insurance rates:

Health: Your health plays a huge role in the cost of life insurance. If you have chronic health issues that increase your risk of mortality, you’re likely to pay a higher life insurance rate. However, guaranteed issue life policies may be an option for customers with more severe health problems who want to forgo a medical exam.

Gender: Men statistically have a lower life expectancy than women, which means they represent a higher risk to life insurance companies. Based on this, life insurance costs are typically more expensive for males than females of the same age and health.

Age: Age is one of the strongest indicators of mortality, so the older you are, the more you’ll likely pay for life insurance. This is why many financial experts recommend that you buy coverage when you are young so you can potentially secure a cheaper life insurance rate.

Death benefit amount: Another factor affecting the cost of life insurance is the amount of coverage you need. Higher coverage limits will cost more to purchase since the life insurance company is agreeing to pay out more upon your death. If you aren’t sure how much coverage you need, working with an insurance agent or using a life insurance calculator may be helpful.

Lifestyle: Your lifestyle can also impact the cost of your life insurance policy. You will likely pay more for life insurance if you drink alcohol regularly or participate in high-risk activities such as skydiving due to the increased risk of death associated with these activities. Additionally, travelling to war zones is considered a major risk by most life insurers and could lead to your policy application being denied.

Type of life insurance: There are several types of life insurance you can choose from. Term Life insurance provides coverage for a set period of time. Because of this, rates are generally cheaper than other types of policies. Permanent life insurance — including Whole Life and Universal Life — is designed to last your entire life. This means that the insurance company is far more likely to pay out the death benefit than it would with a term policy. Permanent life policy rates are typically higher to compensate for this

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What doesnt impact your life insurance premium?

Although there are many factors that contribute to your life insurance premium, there are also some criteria that don’t impact costs.

Location: Unlike with auto or home insurance, your location will not affect the cost of your life insurance. You will need to provide your address on the life insurance application, but it has no impact on the cost.

Credit history: While auto and home insurance rates often factor in your credit tier (if the law allows it in your state), your life insurance policy does not.

Homeownership: Your living situation isn’t factored into your life insurance rates. Whether you own, rent, or anything else, it’s not a part of how much you pay for life insurance.

Driving record: Unsafe drivers may have a higher risk of mortality, but life insurance companies do not ask for or check your driving record when rating your policy.

Marital status: In almost every state, your insurance company can factor in your marital status when determining your auto and homeowners insurance premiums. However, marital status is not a rating factor for life insurance.

Race or sexual orientation: Insurance companies do not factor race or sexual orientation to calculate rates, no matter the type of coverage.

The number of beneficiaries you name: The number of life insurance beneficiaries you choose does not impact your premium. Still, you will have to decide how much of the death payout each beneficiary receives (and how they receive it). You can elect that your beneficiaries receive equal portions of your death benefit or grant each a specific percentage. Some life insurance policyholders may prefer their death benefit be paid as a lump sum, while others opt for instalments. Regardless, these choices will not impact your rate.

The number of life insurance policies you have: There are no laws that say you can’t hold multiple life insurance policies, and some people choose to have more than one. You will, of course, be paying more combined premiums if you hold multiple life insurance policies, but each policy does not affect the other.

Life insurance companies care most about factors that impact your life expectancy, such as your current health and family medical history, which could contribute to health issues in the future. If an insurance company believes you have an increased risk of passing away prematurely, you’ll see a higher rate that reflects that risk.

How to lower your life insurance rates

Typically, life insurance premiums do not vary much from provider to provider. Many of the factors that determine the cost of life insurance are fairly rigid, like your age, coverage amount, and health status. Additionally, carriers are legally not allowed to offer discounts on life insurance. That being said, there may be strategies available to help you save on your premium:

Maintain a healthy lifestyle: Regular exercise, a balanced diet, and routine medical check-ups may earn you cheaper life insurance by promoting better health.

Manage medical conditions: Chronic medical conditions such as heart disease and diabetes typically increase the price you pay for life insurance. However, if you demonstrate to your insurer that you are being proactive about managing any health conditions, you may see a less severe surcharge.

Avoid high risk hobbies: Participation in potentially life-threatening hobbies like skydiving, bungee jumping, or scuba diving usually causes your premium to increase.

Apply for a policy early: Life expectancy in the U.K. currently hovers around 76 years. Applying for a policy while you’re still young typically yields the lowest rates, as carriers do not anticipate having to pay out a death benefit for a longer period of time.


In conclusion, unravelling the intricacies of the cost of life insurance reveals a nuanced interplay of factors that demand careful consideration by prospective policyholders. The age of the insured, health status, lifestyle choices, and the types of policy selected all contribute to the premium calculations. While younger individuals may enjoy more affordable rates, maintaining a healthy lifestyle and addressing health concerns promptly can positively impact costs. 

The balance between the desired coverage amount and affordability is crucial, with the type of policy, whether term or permanent, playing a pivotal role in determining premiums. As individuals navigate the complex landscape of life insurance costs, understanding these variables empowers them to make informed decisions that not only provide financial protection but also align with their unique circumstances and long-term goals. 

Regular reviews, shopping around for quotes, and seeking professional guidance contribute to a holistic approach in securing life insurance that is not only cost-effective but also tailored to ensure the well-being of your loved ones in the face of life’s uncertainties.