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A premium in life insurance is the regular payment you make to keep your policy running.
In exchange, the insurer agrees to pay out a lump sum to your chosen beneficiaries if you pass away while the cover is active.
Premiums are usually paid monthly by Direct Debit, though some people choose to pay annually. As long as your payments are up to date, your policy remains in place.
What Affects the Cost of Your Premium?
The amount you pay depends on several things, including:
- Your age
- Your health and medical history
- Whether you smoke
- Your occupation
- The type and amount of cover you choose
- The term of the policy (how long it lasts)
Generally, the younger and healthier you are when you take out life insurance, the lower your premiums will be.
The insurer uses this information to assess how much risk they’re taking on, which helps them calculate the cost of cover.
Even small details, like your weight, family health background or any medications you’re on, can play a part in the final figure.
When we help arrange cover, your protection advisor will go through all of this with you. We’ll find a policy that balances value and protection, and explain why the cost is what it is.
What Happens If You Miss a Premium?
If you stop paying your premiums, your policy could be cancelled. Most insurers offer a short grace period to catch up, but if the payment is not received, the cover will end.
This can catch people out, especially if they forget to update their bank details or accidentally cancel a Direct Debit.
If a policy is cancelled and you still want cover, you’ll need to reapply, and the new premium might be higher due to age or changes in health.
We always recommend setting up payments in a way that’s manageable for you.
If your income changes or you’re unsure whether a policy is still suitable, speak to a protection advisor first before making changes.
Can Premiums Ever Change?
Some life insurance premiums are fixed for the full length of the policy. This is known as a guaranteed premium. It means the cost will not go up, even if your health changes or inflation increases.
Other policies may have reviewable or increasing premiums. These are sometimes chosen to keep pace with inflation, or to reflect the rising cost of cover as you get older.
The exact setup depends on the type of life insurance and how the insurer structures their policies. We’ll always explain this clearly before your application goes in, so you know what to expect.
If you’re reviewing a policy you already have, we can also check whether it has any planned increases or review points.
Will You Always Need to Pay Premiums?
In most cases, life insurance is paid for throughout the entire term. If you choose a policy that runs for 25 years, you’ll make regular payments for that full period.
Some whole of life policies work slightly differently. These can include options to stop paying after a certain age, although they tend to have higher premiums from the outset.
These types of policies are usually set up for estate planning or funeral cover.
It’s also possible in some cases to include a waiver of premium. This is a feature that keeps your cover going if illness or injury stops you from working for a period of time.
It’s not included by default, but can be a useful benefit depending on your circumstances.
What Role Does a Protection Advisor Play?
Your protection advisor will help you understand how premiums are calculated, compare insurers, and check the policy structure fits your needs now and in future.
We take the time to explore your health, lifestyle and personal priorities so we can find a balance between cost and cover that you feel confident about.
We also look at how different policy types, like level term, decreasing term or family income benefit, affect the premium and overall value of the cover.
We’ll explain the differences between fixed and reviewable premiums, whether your policy might include benefits like terminal illness cover, and how to structure your payments so they’re manageable.
Working with a protection advisor means you don’t have to go through the fine print alone.
We’ll walk you through it, flag anything you might want to consider, and handle the application process on your behalf.
