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Life Assurance Loading | Why?

life assurance loading

Why does my mortgage protection cost so much?

So those scoundrels at Aviva, Irish Life, Royal London, New Ireland or Zurich Life have increased your premium, eh?

And you’re wondering why?

Let me explain:

There are a variety of reasons why your life assurance premium has been loaded/increased such as

  • Build – Body Mass Index outside the normal range.
  • Physical or mental health – current issue or previous issue
  • Family history – hereditary illness in your family.

Basically, the underwriters have taken the view that there’s a greater risk of you making a claim on your policy compared to someone in perfect health.

You see life insurance providers have access to massive amounts of data on all types of illnesses and how many claims each illness causes.

Don’t take it personally, you’re just a number with a certain set of characteristics that they slot into a certain risk category

  1. If you’re 45, overweight and a smoker, the insurer will put you into one category.
  2. If you’re 45, normal weight and a non smoker, you’ll go into a different category.

On average, the chances of a claim (the risk) will be higher in the first group.

For this simple reason, people in this group will pay a higher premium to make up for this risk.

What does a +100% life assurance loading mean?

Someone in perfect health will pay the normal price or what’s known as the ordinary/standard rate.

If you get a life insurance quote on our website, we’ll show you this ordinary rate.

life insurance quote


But if you have a health condition, the underwriting team at the insurer may decide to load your policy / increase your premiums.

The minimum permanent loading a life insurer will add to your policy is +50%, the maximum it will apply is +300%.

If the insurer believes that your health issues result in a loading of over +300%, they will decline.

In real terms, how do loadings work?

A life insurance loading of +100% means the insurer will add around 100% to the normal price.

So if the normal price is €31.87 and you receive a loading of 100%, you will pay €31.87 + (100% x €31.87) = €63.74

A 150% loading would mean a final premium of around €31.87 + (150% x €31.87) = €79.67

What is a per mille loading?

Alternatively the insurers add a per mille loading which is usually temporary but can be very high. This is most common if you’re in remission from cancer for less than 5-10 years. The insurer will add a per mille loading until you are 5-10 years in remission. At that time, the insurer removes the loading and your premium reduces back to the ordinary rate. An recent example may help clear this up:

Sarah had a GIST (Gastro Intestinal Stromal Tumour) with a total Gastrectomy four years ago. Her bank declined her application, three of my insurers could quote but those quotes varied enormously:

  • Insurer A : €7.5 per mille for 3 years
  • Insurer B : €7.5 mille for 5 years
  • Insurer C : €10 per mille for 3 years

Sarah needed €300,000 cover so her additional premium was €7.5 per mille / per thousand euro of cover = €7.5 x 300 = €2,250 extra per year for the next 3 years. In 3 years, her premium will reduce to the standard rate of €27 per month.

Are life assurance loadings fair?

My grandfather, pictured above, was a smoker and lived until 87.

If he had life insurance, as a smoker he would have paid higher premiums all his life but in the end would have outlived his policy.

On the other hand a friend of his, who didn’t smoke, could have died at 60 paying lower life assurance premiums than my grandfather.

Is that fair?


However mortality data will prove that my grandfather should have died at a younger age.

Statistically, the group of smokers he was lumped in with would, on average, die at a younger age than the non smokers.

And insurers base everything on data.

It might not be fair that you’re classed as a bigger risk just because you have a certain illness but for now, that’s the way it is.

Tell me about the base monthly premium

What’s that I hear you ask?

This is probably the most important factor and the easiest to avoid.

Each life insurance company has a base premium – they cannot offer you a price lower than this.


BOI Life – base premium of €20 per month

Zurich Life – base premium of €10 per month.

Let’s say you apply for €50,000 mortgage protection.

BOI Life can only offer it for €20 per month as this is the lowest monthly price they can offer.

However Zurich Life can give it to you for just €10 – again this is their lowest monthly price.

Unfortunately you have some serious health issues so your premium is loaded by 300%.

This increases the BOI Life premium to €80 while the Zurich premium increases to €40 per month.

  • That’s €40 a month extra you need to pay for the same cover for the life of your policy.
  • That’s €480 per year extra for the same cover.
  • Over 30 years, that’s €14,400 for the same cover – you’d be a fool to pay it.

If you’ve been offered a high life insurance premium by BOI Life, you need to get in touch.

Can you avoid a life assurance loading?

If an insurer has increased your premium, make sure that insurer is the most sympathetic insurer for your health issue.

For example, if you have a BMI of 35, one insurer will offer you the normal price whereas other insurers will load your premium.

As always, shop around or use a specialist broker who knows which insurer is best for your health issue

I hope that’s cleared things up.

If you’d like me to discuss your particular case with my underwriters, anonymously, please fill in this short questionnaire and I’ll be right back.

Nick McGowan | making life insurance easier


Life Insurance
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