Saturday, June 15, 2024

Online life insurance – How to apply

Whilst surfing the web, you’re bound to come across countless online ads for life insurance. We all want to protect the people we love, that’s why life insurance is a safety net like no other.  Applying for life insurance online can be quick & easy – if you know where to look.

Just like any long-term purchase, you’ll want to do your homework beforehand. So before you begin your search, let’s understand the basics of a life insurance policy.

What is life insurance?

Life insurance is a form of insurance that provides support for your family when you die. Typically, your insurer pays a lump sum to your loved ones upon your death. The policy pay-out can be used to cover any living expenses or outstanding payments your family may struggle to pay off alone.

Among many things, the payout from a life insurance policy can be used to help with:

  • General household bills
  • Mortgage repayments
  • Outstanding payments like loans & debts
  • Childcare support
  • Education costs like school or university fees
  • Funeral expenses

When you take out a life insurance policy, you will start paying monthly premiums to your provider. If you fail to pay your premiums, you will no longer be covered or receive repayment for the premiums already paid.

Types of life insurance

We’re all different, that’s why there are several types of life insurance policies we can choose from. These types of cover mainly differ in terms of cost and the length of cover. Ultimately, the cover you choose should reflect your budget to ensure you can keep up with your premiums.

Whole life insurance

Also known as ‘life assurance’, whole life insurance covers you for the remainder of your life, instead of a fixed period of time. Though it can be more expensive than other policies, you are guaranteed a payout – so long as you keep paying your premiums. This policy offers a worry-free solution to life insurance, ensuring cover no matter when you die.

Term life insurance

Unlike whole insurance – which provides permanent cover, term life insurance has a set policy length (i.e 20 or 30 years). If you outlive the cover length (which is a good thing!) the policy expires and you will no longer receive cover or refund for the premiums paid.

Term life insurance can be bought in 3 forms of cover:

  • Level term – The pay-out amount remains the same throughout the length of the policy. However, the pay-out is not protected by inflation and could be worth less later down the line.
  • Increasing term – The value of your pay-out increases over time to protect it from inflation. As the pay-out increases, so does the cost of your premiums.
  • Decreasing term – Usually taken out to cover a large payment like a mortgage loan.  Over the term of your policy, the value of your pay-out decreases by a certain percentage.

Joint life insurance

Popular with couples, spouses & business partners, joint life insurance covers two people under a single policy. It can work out much cheaper and easier to manage than individual policies. Most standard joint policies pay out and end after the first death – the surviving member will need to take out further cover if required.

Critical illness cover

Critical illness cover can be bought as a standalone policy or as an add-on to a life insurance policy. It pays out in the event you are diagnosed with a critical illness, supporting you and your family during this difficult time. It’s important to understand which illnesses you are covered from and how the provider defines them, as it can vary depending on the provider.

There is also terminal illness cover – which typically pays out if you are diagnosed with a terminal illness which you will die in less than 12 months.

Where can I buy life insurance online?

There are a number of routes to use when buying life insurance online, first, you’ll need to get a quote from an insurance provider. A quote is an estimate of how much a life insurance policy will cost you monthly. This is usually calculated by age, health, smoking status, occupation and other health and lifestyle factors.

You can apply for life insurance online with providers such as:

For expert advice, it’s worth speaking to an online insurance broker as they take your personal circumstance into searching for a policy. If you are unsure about the financial aspects of a policy, it’s best to speak with a financial adviser. They can advise you on a policy that matches your budget.

What is the cost of life insurance?

As already mentioned, there are several factors that determine the cost of life insurance policy. Depending on the type of life insurance you may be required to undertake a medical exam. The insurer normally asks you some general health and lifestyle questions regarding:

  • Your age
  • Health
  • Occupation
  • Smoking status
  • Type of cover you want
  • The length of cover required

Age has a significant impact on life insurance costs, it’s typically cheaper to take out a policy when you are young. As you get older, the cost rises – mainly due to the reduction in your life expectancy as well as an increased risk of developing health conditions.

Who needs life insurance?

We don’t think it’ll happen to us, but sadly we all have to die one day, that’s why  It’s always worth considering life insurance. Generally, you should get life insurance cover if you have any dependant who relies on you financially. The people who typically need life insurance are:

  • Main earners of the households
  • Spouses or partners
  • Young families
  • Single parents
  • Business owners

None of us want to leave our family with any financial burdens when we die. That’s why the sooner you take out a life insurance policy, the sooner you can give you and your family peace of mind.

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