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FACTORS LIFE INSURERS USE TO ASSESS YOUR RISK AN insurance company first needs to know the risk it is taking on before it will agree to insure you for death or disability. This is known as underwriting. If you present a high risk to the company, you will pay a higher premium than if you present a low risk, because the probability of claiming is higher. Insurers look at several factors when assessing your risk, through a list of questions in the application form, which you need to answer fully and truthfully. The most common factors are the following.
1. AGE
2. GENDER
The older you are, the higher the chance of you falling ill or dying. Someone taking out a life policy in their twenties will pay a far lower premium than someone doing so in their sixties.
Women tend to live longer than men – by seven years, on average. Therefore a woman will pay a lower premium than a man for the same amount of cover, all other things being equal.
