6 factors that can impact your life insurance policy

A number of factors can affect whether life insurance is a good option for you, from your age to what you do for a living. We take a closer look.

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Life insurance is one of those things that many people consider but are still unsure about. Is it worth the cost? How likely is it that the insurer will refuse to pay? How much about your life and medical history do you need to share with a company to qualify for insurance?

According to Mubina Pirmohamed, head of life insurance at CompareTheMarket.com, there are six things that can impact the cost and availability of your life insurance policy.

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1. Your postcode

Where you live can have a direct impact on how much of a risk insurance companies think you are. If you live in an area with short life expectancy and high rates of crime or drug use, this could affect your premium. For example, Actuarial Post points out that all things being equal, a person in Brent could pay around £22 per month for life insurance. The same person living in the Highlands would pay more than £41 per month. 

2. How old you are

According to Mubina Pirmohamed, “The older you are, the more you’re likely to pay for life insurance because you’re considered more of a risk.”

She adds that the average price of life insurance is under £20 for people aged 16 to 29, but close to £30 for people in their 30s. 

3. Your driving record

If you have a poor driving record that includes accidents, then an insurance company can decide you are high risk. This will directly affect your premium. If your driving record is particularly poor, the insurance company could even deny your application.  

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4. Your health

“When you apply, you might be asked about whether you smoke, as well as your weight,” Pirmohamed explains.

An insurance company can deny you coverage if you have certain pre-existing medical conditions, such as diabetes or asthma. Or they might offer you coverage but at a much higher premium. 

An insurer can also ask you if you’re pregnant. This might sound a bit discriminatory, but some pregnancies are high risk. As a result, some life insurance companies might be a bit uncomfortable granting you a policy if you’re experiencing pregnancy-related medical problems. 

5. What you do for a living

If you have a high-risk job, insurance companies might be unwilling to offer coverage or only offer it at a higher premium.

What’s considered high risk for insurance purposes might surprise you. For example, occupations like firefighting or emergency services make perfect sense. But jobs in construction and fishing can also be considered high risk depending on what the job involves.

“Other occupations may require speciality life insurance, for example, roles where you’re required to travel abroad, especially to dangerous locations,” says Pirmohamed.

If an insurance company denies you coverage because of your profession, ask somewhere else. The list of dangerous occupations can vary among providers. You should also ask your employer whether they offer their own policy or whether they can recommend a company that will accept you.  

6. What you do for fun

If your idea of a fun weekend is to go skydiving, swimming with sharks or free climbing, you might be considered high risk by an insurance company. Although your hobbies are unlikely to be a reason for denial, you might end up paying higher premiums. Be aware that the activities you choose and how often you do them could have an effect on your premium. 

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