Life Insurance Premium Calculator
When taking out life insurance, one of the first things that most people want to know is how much the insurance is going to cost them.
Premiums for life insurance take into account a number of different factors determined by the insurers, and the only way to obtain a quote on your cover is to use a service that can accurately calculate the premiums.
There are various sources that can calculate your insurance premiums. The insurance companies themselves can provide a quote over the phone, as can many financial advisers. There are also a growing number of websites that incorporate a life insurance premium calculator as part of their service.
The information required to calculate your life insurance premium will generally consist of your age, gender, occupation, smoking status and the sum insured, which is the amount of life insurance cover you require.
How the life insurance calculator works
A life insurance premium calculator works by taking into account various factors relating to your own personal situation. Some of these factors have a large impact on the overall premium, whilst other factors can have a much lower influence on the final calculation.
The amount of cover you require will have one of the largest impacts on your premium. The more cover you require, the higher the insurance premium will be.
Your age will also have a major influence on the insurance cost. Generally the older you are, the higher the premium will be. This is because your risk of serious illness and death increases as you age. During a person’s twenties and thirties their life insurance will be relatively cheap, but once they reach their late fifties and sixties the cover will be considerably more expensive.
The life insurance premium calculation will always be higher for smokers when compared to non-smokers. This is due to the increased risk of premature illness and death that smoking is known to cause.
What you do for a living will also have an effect on your premium, especially if you undertake hazardous work such as underground mining or high rise window cleaning. Generally the more risky your occupation is considered, the higher your life insurance premium will be.
The factors detailed above will have an impact on your initial life insurance premium calculation, however as you progress further through the application process there are other factors that can cause your premium to increase.
If your life insurance application reveals that you have any existing serious medical conditions, the insurer may calculate a loading to be placed onto the policy. This is generally done on a percentage basis. For example a serious issue may attract a 50% loading (which increases your premium by 50%) and a more serious issue may attract a higher loading of 100% or even 150%.
Calculating your life insurance premium
In order to calculate the most accurate premium for your life insurance it is important to provide all of your relevant information and answer the questions as truthfully as possible. By leaving out any information you may find that your premium will change once the full underwriting process has been completed by the insurer.