What it costs you to pay for life insurance coverage will probably be higher or lower than what your friend or your brother pay for, even if he is your twin. And that’s even if you have all taken out the same policy with the same insurance company. This is because all of us are affected differently by the factors insurance companies take into account when calculating the monthly premium.

How Do Life Insurance Companies in UAE Calculate Premiums?

The premium you pay will depend on the level of life insurance you would want. For instance, if it includes cover for dread disease and disability, premiums are typically higher. Other factors will still affect how much you pay each month – the main factor being the length of time you are likely and still willing to pay the premiums.

It’s all about risks. You, your family, and your insurance company all wish for you to live a long and healthy life. For you and your family, it’s about enjoying life together for as long as possible. For the insurance company, it’s about the business placed with them, and the risk they are undertaking. After all, life insurance policies are long-term policies.

Life insurance companies in the UAE will look at your medical history, health and lifestyle factors which could influence your life expectancy, and your financial history to see whether you are likely to meet your premium payments in the long term. Mathematical calculations and statistics on how much on average these factors may decrease or lengthen your lifespan, or ability to pay premiums, all play a part in the insurance company’s decision on whether to grant life cover at all and the premium you would need to pay if they do.

The Top 10 Factors Affecting the Premium

1. Age and Gender
The premium increases according to your age when you sign up for life insurance, so it’s cheaper if it’s bought early on in life. Traditionally, women live longer than men, so they may also receive lower premiums.

2. Height and Weight
Overweight people are at a greater risk of diseases like diabetes and heart problems so provide a greater risk.

3. Your Medical History
Your current health status as well as pre-existing conditions, operations and health problems, and a family history of serious diseases or illnesses are all taken into account.

4. Alcohol Consumption and Smoking
Because of their links with serious illness, these habits are likely to raise premiums considerably.

5. Your Profession
There is more risk attached to those exposed to hazardous substances or situations, and those who have to spend a lot of time on the road, in the air or underwater.

6. Your Financial History
If your income, debts, and payment history paint a sad picture, it will increase your risk level and your premium.

7. Payout Levels:
A policy structured to have decreasing payout levels as you get older will probably mean a reduction in premiums compared to fixed, long-term policies.

8. Number of Dependents
The more dependents you have, the higher the amount of cover you will need to ensure the payout will be sufficient enough to meet their needs. And a bigger cover does come with a higher premium.

9. Mode of Premium Payment
How and when you pay your premiums can affect how much you pay. The most common choice to pay on a monthly basis often increases your costs in the long-term because it raises the insurance company’s administration and operating costs. Quarterly, six-monthly or annual payments may reduce the premium costs overall.

10. Guaranteed Payouts
When you take a whole life policy, your payout is guaranteed regardless of how long you live, provided your policy is in force. Your premiums will probably be higher than if you were to take term life insurance which is for a set term of several years.


Finding your way through the various factors that govern your premium levels, and understanding why they have such an effect on what you have to pay can be both confusing and depressing. It might even let you feel that it is not worth the effort.

But it is not necessary to go through the process alone. InsuranceMarket.ae can help you compare the best life insurance deals from top insurers in the UAE, find the policy customized to your requirements, and help you make the right choice.

About Author

Rachel Al Mughairi

About Author

With over 34 years in the international insurance industry in a variety of senior management roles, and as holder of the Diploma in Insurance from the Chartered Insurance Institute, Rachel surely knows her insurance! With experience in London, continental Europe and the Middle East, Rachel is here to share her knowledge and help you understand more about insurance products in this easy-to-understand series of videos and blogs.