In our latest article, we look at some of the best ways you can save money on your life insurance.
1. Get it while you’re young
- The best way to get cheap life insurance is to get it while you’re young, the older you get the
more expensive policies will become. Life insurance might not be at the top of your agenda, but
trust us, the older you will be thankful for your foresight!
2. Get the right policy
There are a variety of policies to choose from when it comes to life insurance, but primarily they fall into two camps; Term and Whole of Life.
Term insurance is a policy which has a set length of time, for example, 20, 25 or 30 years and is typically aligned with major commitments such as a mortgage. If you die during the policy’s duration, your family will receive a lump sum pay-out. There are two types of term life insurance policies, level and decreasing. Level pays out a fixed amount regardless of when you die, so if you take out £150,000 of cover today, your benefices will receive that amount if you were to die in 20 years. Decreasing term is different in that the amount it pays out will reduce every year, so £150,000 of cover in 20 years would be significantly less. Decreasing term life insurance is one of the cheapest options and is usually used alongside a big debt such as a mortgage, so the debt and the payout reduce alongside each other.
Whole of life insurance
Whole of life insurance, as the name implies, will cover you for your whole life, assuming you keep up with the monthly payments. Seeing that it is guaranteed to payout, it will be more expensive than level or decreasing term policies.
Finding the right policy
Life insurance can be complicated which is why we always recommend speaking to an independent broker such as myTribe Insurance who can give you free advice on based on your circumstances and help you compare the UK’s providers.
3. Set the term correctly
When you set your life insurance policy up, you need to make sure you think carefully about how long it should run for. Ask yourself why you’re getting the policy and when those reasons may not be relevant. For example, you may wish to have the policy for the length of your mortgage so that should you die your family can stay in the family home. Equally, you may only want cover while your children and young. Just bear in mind that the longer you have a policy the more expensive it will be.
4. Compare policies
As we’ve already alluded to when we mentioned you should speak to a life insurance broker, comparing policies is one of the best ways to bring the cost down. If you’re not keen on speaking to someone there are also plenty of online tools you can use that will give you the comparison you’re looking for but won’t be able to provide you with personalised advice.
5. Don’t over-insure
When you’re taking out your policy it’s very tempting to get as much cover as you can, but it needs to be affordable, not just today but in years to come too. We always recommend only insuring yourself for what you need, if your family could just as well survive with £200,000 there isn’t a need to cover yourself for £500,000.
6. Give up smoking
Finally, and at the risk of sounding like a parent, giving up smoking is another excellent way to reduce your health insurance costs.