Let’s face it – it’s hard to get enthusiastic about buying life insurance when you’re young and healthy.

Have a laugh with this YouTube video….

Hopefully you won’t leave it this late to get your own life insurance sorted out!

Also see this previous post on buying life insurance when you’re young!   

Part of the job of a financial adviser is to help an applicant for life insurance work out how much life insurance they need. But here’s the issue… after an applicant’s ‘needs’ are calculated to several decimal places, do you know how much life insurance they end up actually buying?  

Here’s the problem for most people.  Their insurance needs are not just life insurance, they are also for medical insurance, trauma insurance, income protection insurance, house and contents insurance and car insurance. That’s a lot of insurance. So it often comes down to where your priorities lie and after considering all your insurances, how much of each you can actually afford.

For anyone looking for some help in calculating their life insurance needs, there are many ‘calculators’ available that you can plug in your details and the calculator will give you a number to use as a guideline.

Here is one of them… see calculator

Q

Hi there,
I want to buy life insurance for both my husband and I. As a 31yr old female non smoker, the initial quote for me comes up at just under $21 a month. My husband is a 29 yr old male who smokes only a few cigarettes a week but for insurance purposes must be declared as a ’smoker’ and his initial quote comes in at $53 a month. It seems amazing how much extra that is, so I checked how much I’d be charged if I was a smoker and my quote went up to $31 a month. Can I ask why he would be charged $22 a month more than me, even though he is younger? Is it really that risky being male? A few dollars difference I could understand but 70% more than a female smoker? Please can you explain this? Many thanks, (Name withheld)

A

No. Male smokers are not penalised.

Life insurance rates are designed to reflect your actual risk of dying earlier than the average of your population. Premium rates are calculated using ‘actuarial’ tables based on actual mortality experience across tens, even hundreds of thousands of lives.

Sometimes these rates can reflect things that are quite scary.

Take the rates for a 25year old male versus a 25 year old female.  The risk of an early death for the male is 175% greater than that of the female.  And younger isn’t better either! The risk for a 20 year-old male is around 60% greater than that of a 30 year-old male.  And smoking is a killer… it increases your risk by anything from 25%~50% depending on your age.  

Email received from [name withheld]…Hi Ed, thank you for taking the time to reply.  I really didn’t know how much expense this husband was going to cost me.  I should have married a 30 year old non smoking woman!! Never mind too late now.

We saw this report a couple of weeks ago…

Bangkok

“Thai dogs are now eligible for life insurance, under a new policy that offers payouts to owners if their pets die, a veterinarian said on Monday. About 2 000 dogs have already been granted life insurance policies since the programme began last year, veterinarian Sombat Pipattanamatha said.

Locally bred dogs can receive coverage worth up to 10 000 baht ($320), while foreign pedigrees can get up to 500 000 baht, he said.

“Dogs are now like family members, and we think they should be well cared for,” Sombat said.

Sombat, who consults with the company that developed the policy, said he is now working on plans that would provide benefits to dogs in non-fatal accidents and that would cover injuries to humans in dog attacks.

Pet insurance is available in other countries, but the idea of providing high-end [life insurance] services to animals is gaining popularity in Thailand as the growing middle class spends more on dogs with fancy pedigrees.”