Covid 19 and the cost of life assurance


You might think the pandemic would have caused insurance premiums for protection to soar. But, so far this has not been the case.

Insuring your life and your ability to earn is clearly a good idea, but how much will it cost?

One common misconception is that since the start of the pandemic, the cost of protection has significantly increased.

As yet there have been no changes to the cost of premiums for life insurance, critical illness cover, and income protection as a direct consequence of the Covid19 pandemic.

There have though been some restrictions in place around the amount of cover that you are allowed to apply for. This is because social distancing measures meant in-person medical screenings could not take place. Insurers subsequently reduced cover levels to account for the increased risk of not being able to examine certain applicants. However, the majority of insurers have recently announced the reintroduction of in-person medical screenings and cover restrictions are subsequently being lifted.

We may see some changes to pricing in the future but, like all insurance policies, this will depend on other external factors that may impact the insurance companies and their re-insurers.

What determines the cost of protection?

Your lifestyle, income, and family circumstances will impact what size and type of cover is best suited to you.

For example, somebody in their 20s with no mortgage or children will not have the same requirements as somebody in their 30s who has a home and a family.

There is no one-size-fits-all, so the monthly premiums you will need to pay can depend on a number of factors.

This makes it hard to determine the cost without knowing the details of the specific individual’s needs, which is why speaking to a protection expert is so important.

The factors that can impact the cost include:

  • Your age when you start the policy
  • Whether or not you smoke
  • Lifestyle factors, such as hazardous sports or motorbike riding, can deem you higher risk
  • Your health – this includes your own health as well as family history
  • Your occupation – some job roles can be deemed higher risk that others
  • Your existing cover – you may already get some protection from your employer which you can use towards covering your shortfalls.

How else can I manage my protection costs?

There are many other ways to influence and in fact reduce the cost of your cover, including budget options, such as ‘short term’ income protection policies which provide a two-year benefit period, rather than a 25 to 35-year term, which would cover the typical length of a mortgage. There are also insurers offering low start premiums, which increase over the term of the policy.

If you are worried about the cost of cover then you should speak to an adviser. We can work out the best option for you based on your budget, making sure that the cover is suitable for you and also affordable.

Some cost examples

The table below provides some approximate figures that you could expect to pay for your income protection or life insurance.

Bear in mind that certain low-risk assumptions have been made on the lifestyle and health of the applicant, in order to produce these examples.

Income protection

An income protection pay-out of £1,500 per month would cover the majority of fixed outgoings for many of our clients, if they were unable work due to illness or an accident.

These estimates assume that the benefit payments commence three months after making a claim. The benefit continues to run until the client is 65 years old. These costs are based on a non-smoker, in good health and occupation class 1 (office-based job role).

25 Years Old - £22
35 Years Old - £30
45 Years Old - £47

Life cover

This scenario assumes the required level of cover is £350,000 over a term of 35 years. These costs are based on a non-smoker with no major medical issues.

25 Years Old - £10
35 Years Old - £15
45 Years Old - £35


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