Last updated: Aug 29, 2023

7 things that affect the cost of protection insurance

Noemie Williams DipPFS
Mortgage & Protection Adviser DipPFS at Mortgages for Doctors

7 things that affect the cost of protection insurance

Protection insurance is a necessary investment for anyone who wants to ensure their financial security in the event of unforeseen circumstances.

But the cost can be confusing and can seem to vary widely.

Whether you're looking for life insurance, income protection, or critical illness cover, it can also depend on a variety of factors.

In this blog post, we'll explore what affects the cost of protection insurance and how you can keep your premiums affordable.

1. Age

One of the primary factors that affect the cost of protection insurance is your age. Generally, the older you are, the higher your premiums will be. This is because insurers consider older people to be more likely to make a claim due to health problems or other issues. If you're young and healthy, you can expect to pay lower premiums than someone who's approaching retirement age.

2. Health

Your health is another crucial factor that affects the cost of protection insurance. If you have a pre-existing medical condition or a family history of certain illnesses, you may be considered a higher risk and charged higher premiums. It's important to disclose any medical conditions when applying, as failing to do so could result in your policy being voided in the event of a claim.

3. Lifestyle

Your lifestyle habits can also impact the cost of your protection insurance. Smokers, for example, are often charged higher premiums than non-smokers, as they are at higher risk of developing health problems such as cancer and heart disease. Similarly, if you work in a high-risk profession such as construction, you may be charged higher premiums than someone who works in an office.

4. Type of insurance

There are many different types of policies available to individuals, businesses, and families. Life insurance is a common choice to provide financial protection for the family in the event of a death. Critical illness cover can be helpful in providing coverage for you if you were to suffer an illness such as heart attack or a stroke. Income protection would pay you a regular income if you couldn’t work because of an illness or disability. Business protection helps if one of your ‘key people’ is diagnosed with a critical illness or dying. The cost of these policies varies based on the specific coverage and other factors, such as age and medical history.

5. Coverage amount

The amount of coverage you require will also affect the cost of your protection insurance. If you want a high level of coverage, you can expect to pay higher premiums. However, it's important to ensure that the amount of coverage you choose is sufficient to meet your needs in the event of a claim.

6. Policy term

The length of your policy term can also affect the cost of your protection insurance. Generally, the longer your policy term, the higher your premiums will be. However, it's important to consider your long-term financial goals when choosing a policy term. If you want to ensure that your family is financially protected for the rest of your life, a longer policy term may be the best option. If you simply want to cover the mortgage, a policy that aligns with your repayment date would work too.

7. Insurer

Finally, the insurer you choose can also impact the cost of your protection insurance. Different insurers have different pricing structures and underwriting criteria, so it's worth shopping around to find the best deal. However, it's important to remember that the cheapest policy isn't always the best option. You should also consider the insurer's reputation, financial stability, and customer service when choosing a policy.

There are many factors that can affect the cost of your protection insurance. Ultimately, protection provides peace of mind and security, so it’s important to invest in solutions that fit your needs and budget. That way, you’ll be able to reap the benefits and avoid any unpleasant issues in the future.

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