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
The underwriters believe there’s a greater risk of you claiming on your policy than 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.
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.
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.
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 would result in 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.
Alternatively, the insurers add a per mille loading which is usually temporary but can be very high. The insurer will add a per mille loading for several years. Then the insurer removes the loading, and your premium reduces back to the ordinary rate. A recent example may help clear this up:
Sarah had a GIST (Gastro-Intestinal Stromal Tumour) with a total Gastrectomy four years ago. Sarah’s bank declined her application. However, three of my insurers could quote, but those quotes varied enormously:
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 three years. In 3 years, her premium will reduce to the standard rate of €27 per month.
My grandfather 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, smokers die at a younger age than non-smokers.
And insurers base everything on data but of course, there are outliers like my Woodbine smoking Grandad Pat!
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.
Each life insurance company has a base premium – they cannot offer you a price lower than this.
BOI Life – the base premium of €20 per month
Zurich Life – the 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.
Let’s imagine, you have some serious health issues so your premium is loaded by 300%.
BOI Life will increase your premium to €80 (base premium x4) while the Zurich premium increases to €40 (base premium x4)
If an insurer has increased your premium, make sure that the 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.
Even worse, have they declined you for life assurance?
You’re not alone, the majority of our customers have quirky health issues which some insurers are only too happy to charge an extra premium for. We’re here to make sure you pay as little as possible for your cover, we might not be able to get you the standard price but we’ll get as close to it as possible.
I’d hazard a guess that you have applied through your bank? Banks only have access to one insurance provider, and that provider doesn’t like the sound of your health issue. But don’t despair, I’m sure I can find you a more sympathetic insurer.
We’ve arranged life insurance with a lower premium increase for:
Here’s a recent case study:
36 year old female in good health
Diagnosed with a blood disorder 13 years ago
No symptoms save occasional bruising if she knocked off something.
Platelet Level 54,000 (moderate ITP)
Before she came to me, she’d been postponed by her bank due to her platelet count.
I discussed her case, anonymously with my insurers. All of them could offer cover but some of the loadings were ludicrous!
This was a 25-year policy so the savings of €40 per month between the insurers amounted to €12,000 over the life of her policy
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.
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