Life insurance is similar to other insurances you may have - you pay a premium to the provider who provides you with an agreed level of cover then, if you die whilst the plan is in force, the provider will pay the agreed sum assured to either the named beneficiaries of the plan or your estate.
The amount you pay for life insurance will depend on a number of factors including: how old you are when you set the policy up, how long you need the cover for, pre existing health conditions, your health at the time the policy is underwritten, whether or not you are smoker and the level of cover you require.
Underwriters decide the level of premium you will need to pay based on the information you give to the insurance company in the application form and any medical evidence they gather as part of the normal application process. Their job is to try to establish the level of risk they are taking that you may die and therefore the likely hood of them having to pay out a claim on the policy you are looking to set up with them. The higher the risk, the higher the premium is likely to be.
Risk is rated according to a variety of factors as mentioned above and will sometimes also include the activities that you undertake at work or in your leisure time. Non smokers normally pay quite significantly less than smokers for all their personal financial planning protection products including critical illness cover and income protection as well as life insurance.