Am I eligible for life insurance?

May 21st, 2022
Am I eligible for life insurance?

Nobody likes to think about what might happen should they die, but it is important to prepare for the worst, especially if you have dependants who rely on your income. Life insurance is therefore considered a financially wise move, and in fact, this kind of insurance makes up the majority of the UK’s insurance market, with this kind of provider holding 70% [1] of such business. Around 37% of people currently have life insurance policies in the UK [2], with a staggering 357 authorised life insurance providers. The three with the greatest number of policyholders are Legal and General, Scottish Widows, and Aviva. However, when considering whether you are eligible to take out a life insurance policy, there are a number of factors to take into account, and being scrupulously honest on your application is essential.

Who Should Consider Life Insurance

If you have a mortgage, or children, then opting to take out life insurance may certainly be considered a good idea. After all, the average cost of bills is around £19,500 a year, with an extra £3000 spent on food. Should you or your partner die, it could leave the family struggling to make ends meet, and potentially jeopardise hopes for the future, such as a university education for the children. Yet worryingly, more than 40% of households with mortgages do not have life insurance cover in place [3].

It may not be necessary to take out life insurance if you are single and have no dependents, or if your partner has sufficient funds to cover your mortgage and family expenses alone. Speaking to a financial advisor can help you decide if you are unsure. Check that your advisor is registered with the Financial Conduct Authority to be certain of getting the right information [4].

Life Insurance For Self Employed People

If you run your own business, then taking out life insurance may be a sound move, especially if you have others to consider.

However, the type of job that you do will likely affect your choice of cover. If your work is largely desk-based (such as an IT consultant, or e-commerce business owner), your level of risk will be deemed lower than somebody who works in potentially dangerous environments, such as builders or roofers. Your occupation should not affect your eligibility for life insurance, but it could have an impact on the cost of your cover.

It’s also important to note that life insurance is not considered a tax deductible business expense, unless you have “key person” status, which means that you are an indispensable person in your business and your company would suffer financially if you were to die.

Factors Which Can Affect Your Life Insurance Quote

This brings us to the nitty-gritty of eligibility for life insurance. Fortunately, if you decide to take out life insurance, then you will have a good chance of finding an insurer who is happy to take you on. However, depending on certain criteria, you could end up paying more in premiums than others who may be calculated as a lower risk.

When you apply for life insurance, you will typically be asked to fill in a questionnaire about your health and lifestyle. Whilst it may be tempting to fudge the truth on a few points here and there, it is absolutely vital that you are scrupulously honest in your answers. Any inaccuracies can leave your policy worthless in the event of your death, and could even leave you open to prosecution for fraud. The following factors will all be assessed by the insurer in order to calculate your level of risk, and therefore your life insurance premium.


If you are over 17 and under 70 years of age, then you should be eligible for life insurance. However, the older you are, the higher your premiums are likely to be. This means that taking out a policy should ideally be done as soon as possible.

Smoker Status

If you smoke, you may find that you pay more for your life insurance premiums, although being an ex-smoker who has quit will likely see you rewarded with lower quotes, with those who have never smoked saving the most money.


If you enjoy hobbies which are considered high risk (such as many adrenaline sports, including scuba diving), or take recreational drugs, then you may find that it is harder to get life insurance. Similarly, if you don’t exercise much at all, and eat an unhealthy diet or drink more than the recommended units of alcohol each week, you may find that you are quoted a higher amount for your life insurance premiums.

Medical History

This is the trickiest area when it comes to determining eligibility for life insurance. Insurance brokers have a list of “pre-existing conditions”, which often include ailments including cancer, stroke, heart conditions, epilepsy and kidney disease. It can even include highly common (and often mild) conditions such as asthma, diabetes, high cholesterol or blood pressure, as well as mental health issues such as anxiety and depression. Having one or more of these conditions can make it harder to arrange life insurance cover, and should you find an insurer that agrees to take you on, you will likely find that your premiums are higher.

The good news is that your insurer will assess you as an individual, and the way that you deal with your condition will have an impact on the outcome of your insurance application. If you manage your condition well, by following your doctor’s instructions, you will be in a good position to get accepted. The insurer will usually ask about any medication that you take regularly, how often you have had the condition, and whether you have been hospitalised as a result of it.

They may also ask if there is a family history of the ailment. They may wish to access your medical records or speak to your GP, or, in some cases, ask you to take a medical assessment in person. Whilst this may feel a little concerning, doing what is asked by the insurer will help to support your application for cover.

It may be possible to take out life insurance with exclusions, which essentially means that you will be covered unless your death is the result of your pre-existing condition. For example, in the case of life insurance for MS sufferers or other progressive diseases, this could mean that a payment is made to dependants if death occurs for an unrelated reason. Taking out life insurance with exclusions can also help to reduce the cost of premiums if you have a pre-existing condition.

When Might Life Insurance Be Denied?

If you have pre-existing conditions but are not managing your health as your doctor recommends, then you might have trouble being accepted for life insurance cover. For example, if you have serious liver disease and drink a lot of alcohol, or if you are diabetic and are frequently hospitalised due to failing to manage your diet and treatment, the insurer may decide that you are too high a risk.

The reverse can also be true: if you have experienced a heart attack or stroke in the past, but you can show that you are living healthily to support your health, you could find that you can access reduced insurance premiums.

Can You Take Out Life Insurance On Someone Else?

If you are financially dependent on another person, then you could be able to take out insurance on their life. This dependency is known as “insurable interest”, and can be appropriate for those in a business partnership, for example, or those who share a considerable financial commitment such as a mortgage. It’s important to note that this kind of insurance is only suitable for business partners, or those in a recognised legal relationship (marriage or civil partnership.) Insurable interest cannot be applied to insure parents or siblings, for example. Joint life insurance can also be a good option for those in a financially co-dependent relationship.

Alternative Kinds Of Insurance

You may want to consider other variants of life insurance, which include critical illness cover, over 50s insurance, and death in service cover.

Critical Illness Cover

This kind of insurance pays you a lump sum in the event that you are diagnosed with a serious illness. It is intended to avoid financial hardships caused by your illness, so is meant to cover such things as mortgage payments, lost earnings, private treatments, and general bills.

Over 50s Insurance

Unlike other kinds of insurance, you will usually be accepted without any medical questions, provided that you are above 50 years of age. These are intended to cover smaller expenses, such as the policy holder’s funeral, or small bequests, and as such are typically whole of life policies. This means that there is a chance that you will ultimately end up paying more than the total cover amount.

Death In Service

Some employers provide this kind of life insurance as a benefit to their staff, and, as the name suggests, it pays out in the event that you pass away whilst employed by the policyholder. The money goes to your beneficiaries.

Choosing Your Life Insurance Policy

There are several options available when it comes to life insurance, so make sure you understand all of the options before you commit to a policy. One key difference is between “term” life insurance and “whole of life” insurance. “term” life insurance offers protection for a determined period of time (usually up until retirement age, or until a mortgage is paid off in full), which is typically around 5 to 25 years. If you die after this period, your dependents will not receive any payout from the insurer.

“Term” life insurance policies usually take one of three forms: level, decreasing and increasing. This refers to the amount that will be paid out should you pass away during the insurance period. With level insurance, the amount remains the same, and will typically be paid to your dependents as a single lump sum. The premiums for this kind of policy are usually cheaper than decreasing or increasing policies.

Decreasing life insurance sees your pay out amount reduce as your policy progresses. This is intended to reflect the fact that financial commitments (such as a mortgage) will similarly grow smaller as time goes on.

With increasing life insurance policies, the amount that you are covered for will grow over the duration of the policy, to keep pace with inflation.

When it comes to “whole of life” insurance policies, they may be a good choice if you intend the money to be used to help with expenses such as your funeral. Often more expensive than “term” life insurance policies, this kind of life insurance policy will pay out no matter how long you live, provided that you have stayed up to date with your premium payments. This means that over the long run, this type of policy can actually lead to you paying more to your insurer through premiums, than your family will receive upon your death.

Always Compare To Find The Best Deal

As with any financial commitment, it makes sense to calculate what you can comfortably afford to pay each month. Using a tool to work out your budget can quickly give you an insight into how much you should be paying for life insurance cover without putting a strain on your other expenses. After all, if you miss any payments on your life insurance policy, you could well find that you are no longer covered and your family will not receive a payment in the event of your death. Citizens Advice have an easy to use, free tool that makes light work of calculating your budget

Once you know how much you can afford to spend on life insurance, it makes sense to compare the different quotes offered by a range of insurers in order to find the right policy for your needs. Online comparison with Free Price Compare makes this simple, and you can filter the results to reflect your age and other pertinent details so you get the most accurate prices.

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