life insurance company

7 Factors to Consider When Choosing a Life Insurance Company

There are many options available on the market when it comes to life insurance, although it can be tricky finding the one most suited to you. This is especially the case with the vast array of different insurance providers out there.

It’s also estimated that up to 1 in 4 adults in the UK don’t have a life insurance policy in place for their loved one if anything were to happen to them. That’s a deficit of £263 billion for families that don’t have anything in place in terms of life insurance. 

In this article, we will go through and explain the 7 factors to consider when choosing a life insurance company. It’s important to know what to think about when making such a big decision such as investing in a life insurance policy.

1. Your Age

When it comes to taking out a life insurance policy, your age will play a big factor in determining what options are available to you. The younger you are when taking out an insurance policy will mean that you have a greater range of insurance products to choose from. 

This is why it’s always best to start a life insurance policy at a younger age in order for you to choose exactly what kind of coverage you want. Premiums and policies will begin to increase from the ages of 50, however, it will be dependant on the individual insurance companies.  

The general rule is that insurers set their maximum age bracket at around 75-80 but this is again entirely reliant on different companies’ policies.  

2. The General State of Your Health 

The majority of insurance companies will require a medical or physical exam in order for you to obtain a policy. Some companies will require you to answer a set of questions in which you will need to disclose any preexisting medical conditions. 

The presumption of insurance companies is that the younger you are the fitter and healthier you will be. 

3. Your Gender

It is widely known that on average women tend to live approximately 7 years more than men. This will mean that women’s life insurance policies tend to be cheaper than men’s policies. Age and gender will play a suitable part in determining how your life insurance policy will be priced. 

4. Whether You Smoke or Drink Alchohol  Excessively

Smoking is viewed by life insurance companies as a negative lifestyle choice when it comes to pricing up your policy. This is due to the risks involved with developing various cancers of the lungs or heart or other health implications from smoking. It can categorise you as a high-risk policyholder and this will inflate your premiums.

The same goes for excessive alcohol use and alcohol abuse. Drinking alcohol in moderation is fine, however, if you are someone who is regularly exceeding the recommended weekly allowance this can lead to damage of the liver and other health complications. 

Life insurance companies will also likely deem you as a highrisk policyholder and will reflect that in the pricing of your insurance. 

5. Check the Customer Reviews and Testimonials

One good way of doing your research on potential life insurance companies is to have a look at review sites and see what their existing customers have to say about their conduct and their policies.

It gives you an unfiltered opinion on how a company treats its customers and whether they would recommend their services. A company with consistently negative reviews might be an indicator that you should look elsewhere.

6. Check an Insurance Companies Financial Stability 

Another important thing to consider when choosing a life insurance company is that they have the capital and ability to pay out to potential policyholders, otherwise known as financial stability.

It is assessed by independent agencies who give a score based on the company’s financial assets and them being to meet the requirements of their policyholders. Each independent agency has its own scoring system, so it’s important to recognise they might not correlate. 

For example, Fitch uses a system that is graded from AAA which is the highest rating score to D which means the company has entered into administration or bankruptcy. Whereas other agencies such as A.M. Best use a system from A++ to S. 

These ratings are subject to fluctuations and change, especially when considering external factors such as COVID-19 and a rise in the number of policyholders making claims. 

Do your independent research and see what these outside agencies have to say about the financial stability of individual insurance companies. 

7. Can You Add to the Existing Policy?

If you take out an insurance policy, it’s worth checking whether that policy can be amended or added to. A lot can happen over the course of 20 to 30 years and you may need to add on things such as other beneficiaries.

Or perhaps you want to cover additional expenses such as funeral costs or critical illness cover. When choosing a life insurance policy, you want to know that your family is taken care of if anything was to happen.

As life continues, circumstances do change and you want to be able to have a level of flexibility to revisit aspects of your cover if required. 

Factors to Consider When Choosing a Life Insurance Company: What Next?

We hope this article on the 7 things to consider when choosing a life insurance company has been helpful and informative. 

When it comes to choosing life insurance, it’s not something you should put off or delay getting. You want to ensure that your family and loved ones are financially secure even if something unfortunate was to happen. 

Do your research and consider the best options and cover that will benefit your circumstances and lifestyle.

If you have any further questions or queries about comparing life insurance, contact us directly!

Leave a Comment

Your email address will not be published. Required fields are marked *