If your earnings support your family or you support them as a stay at home parent, then you may be worried about how your family would cope should you die.

Life insurance provides an important safety net in the form of a lump sum for your loved ones and should form part of your financial planning. The financial protection provided will help them to pay essential bills, may pay off the mortgage, and will mean that they are provided for even if you are not around.

But in this time of increasing bills and expenses, you may be thinking about the cost versus the benefits of life insurance and wondering how to be sure that you are getting the best price for your life insurance, and how is the price is calculated.

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What affects the cost of life insurance?

When you get a quote for life insurance, you will typically give the insurer information about you that will determine the price you pay for life insurance.

Life insurance premiums are very individual and reflect several factors, so the range of different premiums reflect this. That being said, it’s really important that the life insurance you buy is tailored to your needs and situation.

The process of determining the price of life insurance for an individual policyholder is called underwriting and depends on the information you provide to your life insurer and what this tells them about the risk you represent to the insurer. 

Individual factors are only part of the picture, however, as the type of life insurance you choose, as well as the amount of cover, will also affect the cost.

Factors that affect how much you pay for life insurance include:

Term life insurance provides protection should you die during the term of the policy, and whole of life insurance provides cover for the whole of your lifetime.

As whole of life insurance is guaranteed to pay out, it is considerably more expensive than term life insurance, which will only pay out if you die during the time period specified in your policy.

If you choose term life insurance, the cost of your policy will also be determined by the term of the policy, with a longer term costing more than a policy that elapses when you are younger.

The sum assured is the amount of money that your life insurance policy will pay out if you die while the cover is in place.

The level of cover, or sum assured, that you choose will depend on your personal financial and family circumstances. For example, your salary, the amount of your mortgage or the ages of your children, for example.

You may also choose additional types of cover as options when buying life insurance, such as a conversion option, which allows you to make changes to the policy, or indexation, which increases the amount of cover in line with inflation. These options will add to the cost of your policy.

The age you take out life insurance will affect the cost. Generally, the older you are on purchasing life insurance, the higher the cost.

You may find if you are purchasing life insurance later in life, in your 50’s for example, that you are limited in the amount of cover you choose due to the cost.

Smoking, vaping, or using any nicotine products will mean that you face a significantly higher cost for life insurance with all insurers and at any age.

The good news is that if you are nicotine-free for 12 months, you may be able to get life insurance at the same terms as a non-smoker.

If you have ongoing health issues or a chronic health condition, such as high blood pressure or diabetes, for example, you will face a higher cost for life insurance.

Your health can result in several outcomes when you are purchasing life insurance. If you have a health issue that is well managed, it may not affect your premium, and you may be accepted on normal terms, or it may result in a loading or higher premium being applied.

If you have previously had a serious health issue such as cancer or a stroke, you may be declined for life insurance or, if you are awaiting medical test results, your cover may be postponed until you get your test results.

If your occupation is considered exceptionally high risk by a life insurance company, then you may pay more for life insurance. Pilots, construction workers, or prison officers, for example, may face higher life insurance premiums than lower-risk occupations such as office workers or accountants. 

Your daily exposure to physical danger and risk of injury or death while at work will be taken into account by insurers in calculating your life insurance premium.

Likewise, if you engage in high-risk hobbies such as extreme sports or skydiving, you may face a higher cost for life insurance cover.

How much can you expect to pay for life insurance?

Just as there are no two life insurance policies that are exactly the same given all of the factors that determine the price, there is no definitive answer to this question.

You will see life insurance advertised with monthly premiums as low as €10 or €15 but it is important to be aware that these prices will be for policies where there is, statistically, a really low risk of a claim being made on a policy with a low sum assured.

In reality, you can expect to pay a range of prices depending on the type of cover you require and it’s really important to bear in mind that the life insurance policy you choose needs to be tailored to you and your circumstances rather than a rock bottom price.

This is where working with an expert insurance advisor, such as Compare Insurance, comes in as they will be able to get you quotes for the right cover from all insurers that are specific to you and your needs and preferences at the best price.

Examples of life insurance quotes

Here are several examples of quotes for life insurance to give you an idea of how much you could expect to pay in certain scenarios.

Example 1

Single life policy, age 35, non-smoker, cover of €500,000 for 35 years, including a conversion option.

Zurich €48.02 per month
Royal London €50.40 per month
Aviva €57.60 per month
New Ireland €57.60 per month
Irish Life €66.47 per month

Example 2

Dual life policy for a couple in their mid-40s, non-smokers, cover of €650,000 for 30 years, including a conversion option.

Zurich €215.48 per month
Royal London €216.81 per month
Aviva €250.31 per month
New Ireland €250.31 per month
Irish Life €299.95 per month

Example 3

Single life policy age 25 non smoker, cover of €200,000 for 40 years, no conversion option.

Royal London €15.15 per month
Zurich €16.35 per month
Aviva €17.14 per month
New Ireland €17.14 per month
Irish Life €18.92 per month

Example 4

Couple, both aged 55, one smoker, cover of €150,000 for 15 years, no conversion option.

Royal London €141.03 per month
Aviva €163.75 per month
New Ireland €163.75 per month
Zurich €165.95 per month
Irish Life €190.78 per month

How to get the best value life insurance

The best way to ensure that you are not paying too much for life insurance is to contact Compare Insurance today to get the best deals on life insurance to protect you and your loved ones. 

Fill in our assessment to get online quotes from every life insurer on the Irish market, or get a call back from one of our qualified advisors to discuss your options and the cover you require and start saving money on your life insurance today.

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