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If you don’t have too much money to spend, the easiest option could be to skip the life insurance policy altogether.
Paying out each month for an eventuality which may seem very far off might not sound like a sensible option, but as the old saying goes ‘it’s better to be safe than sorry’.
We don’t know what’s around the corner, so instead of foregoing the life insurance completely why don’t we take a look at some handy tips that could help you save money on your premium, so you aren’t missing out on the cover that you need.
Don’t go for the first quote you get
When it comes to purchasing your car or home insurance, you spend time comparing quotes from different providers so why wouldn’t you do the same for life insurance?
Life insurance may not be as simple as some other insurance policies, but if you spend time getting a few quotes from different providers then statistically, you’ll increase your chances of finding the best deal.
So you don’t have to do all the legwork yourself, you may want to consider comparing life insurance policies through a broker who’ll be able to search the market on your behalf to make sure you are getting the best deal for your circumstances.
Only get the cover you need
As much as it’s recommended to make sure you aren’t under insuring yourself, it also works the other way – the more cover you require, the more your premium will cost so if you don’t actually need it, then why pay for it?
A huge £500k payout may seem attractive but will your family actually need that much? Make some calculations and although you should try to consider any future changes, inflation costs etc, try to be realistic with the cover you require and this will help you to bring your premiums to an affordable level.
Get healthy
If you are a smoker, then stop! As many health risks are attributed to smoking, you are statistically more likely to make a claim on your life insurance or critical illness insurance policy if you are a smoker. A higher risk means higher premiums for you.
By quitting the cigarettes, you become less of a risk to the insurer and your efforts will be rewarded by a lower premium, however bear in mind that some providers will expect you to be smoke-free for at least 12 months before applying for life insurance.
You’ll face a similar situation from your insurance provider if you are overweight – if your BMI is in the health range (between 18.5-24.9) you will pay a standard premium, however the higher your BMI the more your premium will increase by. If you can lose weight and maintain a healthy BMI range before applying for your life insurance this could help to lower your payments.
Don’t leave it too late
As your risk of dying or becoming seriously ill increases with age, policies will becomes more expensive as you get older. If you intend to take out life insurance at some point in your life, then don’t delay. Planning ahead and taking out a policy while you are still young and in good health could help to get a low, guaranteed rate on your premium.
Consider a joint policy
If you have a long-term partner or spouse, then you may be able to save money on your life insurance by taking out a joint policy.
Make sure you consider this wisely – joint policies will only pay out on the first death so if you are survived by your partner they will no longer be covered. If you have dependents then it may be wise to think about separate policies that will pay out on each death.
Choose the right type of insurance
Term life insurance pays out in the eventuality you die within a certain period of time (typically within the next 20-30 years if taken out alongside your mortgage).
Whole of Life insurance guarantees to pay WHEN you die, as opposed to IF, so no matter when in your life cycle this happens your beneficiaries will receive a payout.
In the insurance world you pay more for certainty so if you’re looking for a cheaper insurance policy then you may wish to avoid anything that offers a guaranteed payout.
Term life insurance could be deemed a risk as once the term ends then you’ll no longer receive a payout, however if you survive the full term then it’s likely that you won’t necessarily need the cover as your mortgage is likely to be paid off and other outstanding debts may be cleared. Setting a realistic term can help to bring the cost of your premiums down.
Although life insurance may be a morbid subject to think about, for many people it is a necessity which can save their family from financial heartache in the future. Many people would find it hard to put a price on the future happiness of their family, however if you can save money whilst retaining peace of mind then so much the better.
Our trained expert advisers have access to the UK’s leading lenders and using their knowledge and skills will place you with the most suitable leader and product for your needs.
So Smart Money are specialists when it comes to mortgage and insurance. We have access to the UK’s leading brokers and using their knowledge and skills they'll place you with the most suitable lender and product for your needs.
Speak to an expert for mortgage advice, life insurance cover, to protect your income, insurance your home or contents and private medical cover.
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