Life insurance is one of those purchases most of us will end up making at some point in our adult life. You certainly aren’t thinking about the implications of passing away, without enough money to support your family, in your early twenties, are you? But, as we get older, what normally steers us from the “I’m thinking about it” to the “I need to get myself covered” phase is usually a major life event like getting married, buying a house or getting the news that a baby is on the way.

So how much does life cover cost?

Well, that depends on two things:

  • The individual applying for the cover
  • The insurance company issuing the life insurance policy (although the rates offered don’t differentiate much)

Let’s start with the idea of individual underwriting for a second. What does that even mean?

Life insurance is nothing more than a legal contract between the insurer and the life insured. In exchange for a premium (normally paid monthly), the insurance company is prepared to pay out a pre-determined amount of money, should the life insured pass away.

Death is inevitable so the insurer will pay out at some stage down the line.

The reason why life insurance companies can stay open is because it’s a numbers game. If they can get thousands of policyholders on books, paying their premiums every month, their risk is spread.

The most important thing for the life insurance company is understanding who they are insuring, and that comes down to asking the right questions upfront.

Life insurance companies use a few underwriting questions to determine the rate at which they can offer the cover. If you picked up the phone right now and called any life insurer to get a quote, these are a few of the questions they are going to ask you before they will commit to a premium:

  • Your gender
  • Your age
  • Your income
  • Your highest qualification
  • Your marital status
  • Your smoker status

The answers to these questions allow the life insurer to determine a risk profile so they can offer life cover at the right premium.

Here is a quick example:

A 30-year old male who doesn’t smoke and earns R20 000 per month might pay as little as R239 per month for R1 000 000 life cover.

A 50 -year old make who smokes and earns the same income might pay closer to R900 per month for the same R1 000 000 life cover.

It’s clear that the 50-year old who smokes is a bigger risk to the life insurer than the 20-year old who doesn’t smoke and as a result the premium is almost 4 times as much.

Interested in finding out how much you could be paying for R1 000 000 life cover?

We’ve used a quoting engine provided by one of our life insurance partners Stangen to draw up comparative quotes based on the same underwriting information (income, smoker status and education)

While it’s important to note that these rates aren’t guaranteed (purely illustrative), it does provide you with an idea of what it might cost you to qualify for R1 000 000 life cover each month, based on your age and gender.

 

Males

 

Age 26                 R1 000 000          R228 pm

Age 27                 R1 000 000          R229 pm

Age 28                 R1 000 000          R232 pm

Age 29                 R1 000 000          R235 pm

Age 30                   R1 000 000          R239 pm

Age 31                   R1 000 000          R244 pm

Age 32                 R1 000 000          R248 pm

Age 33                   R1 000 000          R253 pm

Age 34                   R1 000 000          R259 pm

Age 35                   R1 000 000          R266 pm

Age 36                   R1 000 000          R273 pm

Age 37                   R1 000 000          R281 pm

Age 38                   R1 000 000          R290 pm

Age 39                   R1 000 000          R300 pm

Age 40                   R1 000 000          R311 pm

Age 41                   R1 000 000          R323 pm

Age 42                 R1 000 000          R336 pm

Age 43                   R1 000 000          R351 pm

Age 44                   R1 000 000          R367 pm

Age 45                   R1 000 000          R385 pm

Age 46                 R1 000 000          R405 pm

Age 47                 R1 000 000          R426 pm

Age 48                 R1 000 000          R450 pm

Age 49                 R1 000 000          R477 pm

Age 50                   R1 000 000          R506 pm

Age 51                   R1 000 000          R538 pm

Age 52                   R1 000 000          R573 pm

Age 53                   R1 000 000          R612 pm

Age 54                   R1 000 000          R655 pm

Age 55                   R1 000 000          R702 pm

 

Females

 

Age 25                   R1 000 000          R169 pm

Age 26                 R1 000 000          R169 pm

Age 27                 R1 000 000          R169 pm

Age 28                 R1 000 000          R170 pm

Age 29                 R1 000 000          R172 pm

Age 30                   R1 000 000          R174 pm

Age 31                   R1 000 000          R176 pm

Age 32                 R1 000 000          R178 pm

Age 33                   R1 000 000          R181 pm

Age 34                   R1 000 000          R183 pm

Age 35                   R1 000 000          R186 pm

Age 36                   R1 000 000          R190 pm

Age 37                   R1 000 000          R194 pm

Age 38                   R1 000 000          R198 pm

Age 39                   R1 000 000          R202 pm

Age 40                   R1 000 000          R207 pm

Age 41                   R1 000 000          R203 pm

Age 42                 R1 000 000          R219 pm

Age 43                   R1 000 000          R226 pm

Age 44                   R1 000 000          R234 pm

Age 45                   R1 000 000          R242 pm

Age 46                 R1 000 000          R251 pm

Age 47                 R1 000 000          R261 pm

Age 48                 R1 000 000          R272 pm

Age 49                 R1 000 000          R284 pm

Age 50                   R1 000 000          R297 pm

Age 51                   R1 000 000          R311 pm

Age 52                   R1 000 000          R326 pm

Age 53                   R1 000 000          R341 pm

Age 54                   R1 000 000          R359 pm

Age 55                   R1 000 000          R377 pm

 

Interested in getting a life cover quote? Chat to our bot, Monty to get a quote today!

 

Until next time.

The Moneyshop Team