How Much Does Insurance Cost?

Premiums costs are worked out based on a number of factors. Please find an explanation below, detailing how the cost of your premium is devised by your insurance company and how it may be possible to reduce the final price given to you.

The first major factor to affect your premium is which insurance company you decide to place your insurance cover with. By specifying a particular insurer can have a significant impact on the premium you pay. Research carried out by Proadvice demonstrates a difference of over £10 between the cheapest premium and the most expensive premium on the market for a like for like plan. Other factors such as type of insurance, level of cover, range of premiums and frequency of premiums can affect your quotes.

From our experience, premiums can differ greatly between providers.

Each insurance company will price you differently dependent on what particular cross section of people they are looking for at the moment in time that you are applying. The insurers like to ensure that they have a balanced pool of various ages and sexes amongst their clientele, so the insurance providers will change their premiums throughout the year to encourage and make their plan more attractive to the desired group at that point in time. 

Insurance companies require a mixed balance of young and old, fit and unwell to ensure that they are not oversubscribed in one particular age or gender group. By applying this method helps the insurer to spread the risk across the board, ensuring they are not left wide open should a new medical condition affect a certain group of people and are then exposed to a potential, large claim.

If you are smoker, your life insurance is going to be more expensive and in many cases the cost can be as much as double. The reason for this is due to the added health risk smoking brings. If you are a smoker, your insurance company will also be firmer in relation to any other medical conditions, such as asthma or concerns based on your height and weight.

The insurance companies all have different Reassurers (financial backers who set the price for insurance) and they all require different information. All of the applications carried out for each insurer are different in that they ask different questions regarding your health, hobbies and your lifestyle and our advisers at Proadvice are experienced to know which insurance companies will ask what questions and therefore can place you with the right insurer and the best available plan. Past drug use could be an example of this. If you have ever tried any recreational drugs it is probably something you do not want to disclose on your life insurance application, yet the question may be asked. Your new partner may not know about things you have done in your past and if your employer is paying for your insurance, you may not want this to be on your application. 

The person you were should not impact on the person you are now. To avoid non-disclosure and personal embarrassment our advisers can guide you to an insurance company who will not ask any questions regarding drug use. Others insurers will only ask if you have participated in any drug use in the last 10 years. The differences in these questions can also be advantageous based on family history, medication and previous travel. 

On obtaining your information, each insurance provider will assess every condition differently, for example, there are insurance companies who will require a full Doctor’s report as soon as you mention that you have high blood pressure yet another insurance company will only ask you for your most up to date blood pressure reading and your current treatment and leave it at that. With the provider asking more questions in the first instance, can speed up the time of getting a plan through and you covered with the appropriate insurance. With an insurer not requesting a Doctor’s report or medical assessment, will enable the insurance company to save money and ultimately pass the savings on to you. This additional information will only be requested if the provider deems it necessary to know more about your state of health. The more an insurance company knows about any medical condition, the better they can price your plan and ensure that you are covered correctly.

How can I save money on my Life Insurance plan? 

The general rule with life insurance is that the younger you are the cheaper your premiums are going to be, in fact it works the complete opposite of car insurance.  When we are young there are much more exciting things to be thinking of and spending money on rather than planning for our future and what may or may not occur but realistically, if you could see into the future you would more than likely take out all the insurance you are ever going to need at a young age to get the best rates that will ever be available to you.  However there are more practical ways to save money on your insurance plan. Speak to a Proadvice specialist adviser today to find out how.

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