There are many factors taken into consideration when taking out any form of insurance. When it comes to life insurance, for example, insurers take into account your age, health, whether or not you smoke and your height and weight, among other things.

Also, if you live a risk free life (i.e. no extreme sports and excessive smoking or alcohol consumption) you are a lower risk at a younger age, as theoretically you have more of your life ahead of you and essentially should have fewer health problems.

Our team got quotes from four life insurance companies to see how the differences in our ages, health and situation would affect our insurance.

Comparing the quotes

The table below is a basic breakdown of the quotations received. To keep the exercise simple and easy to compare, a total life insurance value of R1 million was used, however, surprisingly this did present some issues.

1Life Life Insurance Vodacom Life Insurance Hollard Life Insurance Triarc Life Insurance
Applicant A: Female; 38 Monthly premium: R 262.42 R 240 R 540.34 R 159.27
Total cover: R1 000 000 R 1 000 000 R 1 000 000 R 1 000 000
Applicant B: Female; 25 Monthly premium: *R 202.04 R 142 R 396.62 R 160.76
Total cover: R 1 000 000 R 1 000 000 R 1 000 000 R 2 000 000
Applicant C: Male; 32 Monthly premium: R 251 R 218 No response to query** R 177.08
Total cover: R 1 000 000 R 1 000 000 No response to query** R 1 000 000
Applicant D: Female; 23 Monthly premium: R 228.03 R 285 R326.17 R 200
Total cover: R 1 000 000 R 1 000 000 R1 000 000 R 1 210 249

*This quote was generated using 1Life’s online tool. Via telephonic application, due to Applicant B’s health record the application had to be underwritten prior to a premium being determined. Feedback was not been received.

**Following several attempts to get a quote from Hollard Life Insurance, Applicant C was not contacted by the insurance company.

The results

Some insurers offer a cashback option, however, this may see your insurance premiums increase. For example, Applicant A’s monthly premium under Hollard Life Insurance would increase from R540.34 to R610.58 if she opted for the cashback option.

In addition, some of the life insurance products automatically include things such as a funeral benefit or disability cover.

Overall, it appears that across the four insurance companies, Hollard charges the highest monthly premium. However, this could be based on additional benefits that you receive as standard with your policy that you may be charged an additional fee for at the other insurers.

Triarc informed Applicant B that the minimum monthly premium for life insurance is R150. As a result, she was not eligible for R1 million life cover, as this would have a monthly premium of only R83.55. The call centre agent therefore increased the cover to R2 million, which resulted in a monthly premium of R160.76. While higher than Applicant A’s monthly premium for Triarc Life Insurance, Applicant B has double the amount of cover.

Applicant B has a chronic health condition, surprisingly this did not impact the monthly premiums too much, since her monthly premiums (based on R1 million life cover across the board) were cheaper than the other applicants. However, despite the condition, as she does not smoke or consume alcohol, these could have contributed to her lower premium.

Who will pay the cheapest premium?

Based on the available quotations, it would appear that a female in her mid to late twenties will receive a cheaper premium for R1 million life cover, than someone in their early twenties or in their thirties.

Surprisingly, as the youngest applicant (and having no known health issues that could have impacted her life insurance quotation), Applicant D received quotes for higher monthly premiums than Applicant A, and in some instances Applicant C. Only for Hollard Life Insurance was Applicant D offered a lower monthly premium than Applicant B. So while you may have fewer health issues at a younger age, it appears you are still deemed a higher risk by the insurance companies in other ways. And as life insurers don’t impart with their all of their underwriting methodologies, we’ll never find out the real reason as to why they may charge more in some instances and less in others.