Find out how companies use risk factors such as your age, health, occupation and hobbies to calculate the cost of life insurance.
Before accepting your application, life insurance companies will ask a number of questions to identify how much of a risk you pose - that is, how likely it is that they will have to pay out.
Each insurer has its own set of underwriting criteria to determine whether to issue a policy and, if so, at what price. This is why premiums can vary from one provider to another.
Insurers will consider a number of different factors when calculating life insurance premiums. These include:
The older you are when you take out life insurance, the higher your premium is likely to be, as you'll be seen as a higher risk to insurers.
As the cost of premiums tends to increase with age, getting life insurance as soon as possible could be worth considering, especially if you have a young family or dependants. There are, however, a variety of options available for older people looking to arrange life insurance.
Insurers take height and weight into consideration as an indicator of whether you have a healthy body mass index. If you're obese you're more likely to suffer from weight-related medical conditions, such as diabetes, heart disease and breathing problems.
Whole of life insurance will pay out whenever the policyholder dies, whereas the more common term insurance only pays out if the policyholder dies in the term of the policy; this means that whole of life policies are more expensive.
Whether your medical history has an effect on your premium or not will depend on the severity of any previous illnesses that you've had or any that you're currently suffering with.
Life-threatening conditions like type one diabetes could increase the price of your cover dramatically, and if you have previously suffered from cancer most insurers won't offer you protection until you've been in remission for at least five years.
Read more about life insurance if you have pre-existing medical conditions.
If you partake in a high-risk hobby - for example rock climbing, sky diving, motorsports, skiing, or horse riding - it can affect your premium negatively
Whether or not your family's medical history is taken into account will depend on the severity of the condition, how many close family members were affected and their age when they became ill. If there's a history of severe illness in your family, such as cancer, it could affect your premium.
Your marital status will be taken into account when processing your application and you may want to consider joint life insurance if you're married, in a civil partnership or cohabiting with your partner. However, you should remember that these policies work on a first-death basis, so there'll be no payout in the event of the second partner dying - think carefully about which option is the right fit for you.
The number of people that rely on your income for financial support are your dependants. These will usually be your close family, for example your spouse and children.
How many dependants you have will play a major part in calculating how much protection you need. The more protection you need, the higher your premium is likely to be.
Life insurance should enable your dependants to continue living the life they're accustomed to and if you have young children you may want to provide them with financial protection until they leave higher education.
Generally, if you've used tobacco in the last 12 months you'll be considered a smoker and your premium could double.
Any outstanding debts - including your mortgage and any loans you've taken out - are major factors when deciding how much protection you need.
Certain occupations will be deemed a higher risk than others. For example, soldiers, pilots, fishermen and off-shore oil or gas industry workers can expect to pay more than those who work in what is deemed a safer environment, such as office and shop workers or teachers.
If you partake in a high-risk hobby - for example rock climbing, sky diving, motorsports, skiing, or horse riding - it can affect your premium negatively as you're more likely to be involved in an accident.
Generally, if you've used tobacco in the last 12 months you'll be considered a smoker. This includes any tobacco-based product including cigarettes, e-cigarettes, cigars and even nicotine patches.
Insurers don't usually distinguish between how many cigarettes you smoke - whether you have a 20-a-day habit or just smoke the occasional one, you'll be classed as a smoker and your premium could rocket.
Excessive drinking - that is, drinking more than the recommended guidelines for alcohol consumption regularly - could see your insurance premium rise as you're more likely to suffer alcohol-related health problems, such as liver disease.
The insurer isn't interested in your last family holiday to France, but in whether you've been anywhere that would pose a potential health risk - for example, if you've travelled to a country with a high level of HIV or tropical diseases.
Also, if you regularly travel abroad for business it could affect your premium.
The reason why you're taking out life insurance will be considered, for instance if you have a young family that you need to protect, or you want cover until you've cleared your mortgage.
The insurer will ask how much you earn to evaluate whether you'll realistically be able to afford your insurance payments.
Remember that if you withhold any vital information or give false information it could invalidate your life insurance should you have to make a claim.
There are two types of premiums available:
Although reviewable premiums normally work out cheaper in the short term, they can be more expensive over the long term as they are likely to increase at regular intervals throughout the duration of the policy.
Prior to the introduction of the European Court of Justice gender directive, your sex would be a major factor in calculating insurance premiums.
Statistically women live longer so they used to enjoy lower premiums, but the introduction of the legislation in 2012 meant that gender could no longer be taken into account when calculating life insurance.