How to get cheap life insurance cover

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Whether you’ve already considered it or not, life insurance is essential for any family. Though death is unpredictable, that doesn’t prevent us from ensuring our families financial future is protected should the worst happen. But why do some people put off buying a policy?

There’s a common misconception that life insurance can be expensive – while this can be true, there are a few ways to cut costs. So, we’ve looked at how you can protect your loved ones and still save money at the same time. Let’s take a look!

How is the cost of life insurance determined?

When you apply for life insurance, your insurer will determine your value and the likelihood of a claim being made. Much like a sportsperson your stock is highest when you are young up until you reach your prime.

There are a number of factors that are used to work out the cost of life insurance. Prior to taking out a policy, your insurer will usually ask you a few questions regarding:

  • Your age
  • Your health
  • Occupation
  • Whether you are a smoker
  • The amount and length of cover you need

Foremost with life insurance, it’s cheaper to take out cover when you are young. The older you are, the higher the chances of death and making a claim, and therefore policy costs rise. The same can be said about your health as if you have any pre-existing conditions you can expect to pay more or even be denied cover.

Types of life insurance

Whilst there are many options available, the two main types of life insurance are whole and term life insurance. Though they sound similar, they work differently from each other.

Whole life insurance covers you for the remainder of your life – so long as you keep up with your premium payments. Your loved ones are guaranteed a lump sum payment, no matter when you die. The main downside to whole life insurance is that it is one of the most expensive forms of cover, though you have the benefit of being guaranteed a pay-out.

Term life insurance (also known as ‘term assurance’) works a little differently, in which your cover lasts for a set period of time (i.e 20 years). Should you survive the policy term you not only will no longer receive a pay-out, you will also need to seek further cover should you require it. Unlike whole life, term life insurance is generally the cheapest form of life insurance cover as it is more of a short term option. It is often taken out to cover a large payment like a mortgage which takes years to pay off.

Do I need life insurance?

Whether you need life insurance or not, depends on your circumstances. For example, if you’re single with no kids you’re not going to be rushing to apply for a policy. However, if you have a family, life insurance is essential to ensure they are protected financially if you were to die.

Life insurance can be to support your family financially in a number of ways such as:

  • Helping with living costs
  • Paying off the remainder of a mortgage, loan or debt
  • To pay towards education costs like university tuition
  • Helping with funeral costs
  • To be used as a gift

The last thing we want is to see our loved ones left with a financial burden, that’s why life insurance is a fantastic way to protect your family’s future.

Tips for getting cheap life insurance

We all love to save a bit of money here and there. Whilst the cost of life insurance mainly depends on your age and health, there are some other ways to reduce the cost of your premiums, let’s take a look!

Look after your health

This may seem easier said than done but, keeping active and eating right is important for all of us, providing many benefits. Not only add years to your life, but it can also reduce the price of life insurance.

Get cover when you are young

The key to getting cheap life insurance is taking out cover when you are young. With life insurance, as you get older, the greater the cost becomes. This is because as you are getting older, the chances of you dying increase and therefore to the Insurer, there is a higher chance of a claim being made.

Take out a joint policy

Joint life insurance is a popular choice amongst couples and spouses as opposed to taking out individual policies as it is easier to manage. A joint policy covers two people under a single life insurance policy and can work out cheaper overall than each of them taking out their own policy. A joint policy works in two ways – first death & second death.

With first death, the policy pays out after the first policyholder dies, the surviving member would then need to get further cover if they require it.

With second death, the policy only pays out when both members of the policy have died and the money then goes to their beneficiaries. 

Quit smoking

Not only is smoking bad for your health but also affects the cost of a life insurance policy. Some insurance companies will even reduce the cost of your premiums as an incentive for you to quit. So if you’re a smoker planning on taking out a life insurance policy, it’s best to quit now, in order to save on costs.

Shop around for the best prices

Just like before making any large purchase, you’ll want to shop around for the best price. Fortunately, there are countless comparison sites out there that can help you find the best prices for life insurance. 

The downside is that the policies are judged on price and not whether or not it is the right policy for you and your family. There are also online insurance brokers who go the extra mile to help you find the best policy for the right price.