5 Top Tips for Women to Save on their Life Insurance : Life has rarely felt so fragile as it does right now, as we all try and work through the global Coronavirus pandemic.
As a result of the tragic loss of life there has been a significant rise in people enquiring about life insurance in order to protection their loved one’s financial future, should anything happen to them.
Having adequate life insurance in place can help protect your family home, meeting future living costs, cover funeral costs and provide an inheritance.
But for many their financial situation has also been negatively affected by the outbreak, with a lot of people losing their job. So, whilst securing life insurance has never been more important, neither has getting the best available deal.
We asked award-winning UK life insurance broker Reassured to run through their top tips for saving money on monthly premiums.
Take out cover whilst you are still young
Most of us woman tend to take out life cover when certain life events occur, such as becoming a mum for the first time or getting married. These significant life events remind us of our own morality and the important of our life for a dependant/s.
However, strangely the perfect time to secure the lowest premiums is to take out life insurance when as young as possible.
For example, if you have the foresight to take out a policy at the age of 25 and before these major life events, then you could lock-in around £200,000 of protection for the next 40 years – all for less than 20p-a-day.
The young you are, the less risk you pose to the insurer, thus the lower your monthly premium. So, get a head start and be proactive.
Quit smoking and kerb your drinking
We all know that smoking and drinking alcohol can have a negative impact on your health, however you may be surprised to know that it can also have a dramatic effect on the cost of your life insurance premiums too.
When you apply for life insurance the insurer will ask you if you smoke, how long you have smoked for and how often you smoke. As well as your alcohol intake and whether you have ever been alcohol dependent etc.
Obviously, the more you smoke and drink the greater the risk of experiencing a health problem and again the higher the likelihood of a future claim in the eyes of the insurer. The result, higher premiums to migrate their risk.
However, all is not lost as you can always quit smoking and/or reduce your alcohol intake in order to better your health (and lower your premiums).
A couple of key things to mention here. One, insurers regard nicotine replacement products the same as they do smoking. Two, you will need to have quit for at least one year for the insurer to classify you as a non-smoker.
Never lie on your application in order to get a lower premium, as this could invalidate your policy and render your selfless investment a waste of time.
Consider joint cover
If you are one half of a couple, you may want to consider a joint life insurance policy, although they are not always the best option.
The main benefit of joint cover is that the monthly premiums are approximately 25%-30% cheaper, compared with two single policies.
So, there can be a considerable saving to be made over the lifetime of a policy. However, joint policies only ever pay out once, usually after the first death. Thereafter, the policy expires, and the remaining partner is left unprotected.
If you have children, and budget allows, it is generally better to have two single policies (one for each parent), as this could mean two separate payouts- effectively double the coverage for 25% more investment.
The level of cover & term length
It will not surprise you to know that the more life insurance cover you take out and the longer the term, the higher your premium. Again, this is the insurer covering their level of risk.
What is important here is taking the time to establish exactly how much cover YOU require, ensuring your loved ones are never over or under protected.
Think about aspects of your life like;
– The balance and term length of your remaining mortgage
– The age until your children are likely to be financially independent
– Family living costs
– Childcare costs, if one of you was no longer around
– Whether you have cover protection through your employer
– Do you have savings you can fall back on
– Rising funeral costs
– Whether you plan to extend your family in the future.
Once you have established how much cover you need and for how long, you will not unnecessarily be paying over the odds for your cover.
Compare quotes and policy types
Whichever insurance policy you require, whether it be pet insurance, home insurance, car insurance or in this case life insurance, in order to get the best possible deal, it is essential to compare multiple quotes.
Why? Because different insurers employ different underwriting criteria and hence, this can result in very different prices.
With life insurance there is also a range of different policy types available, level term, decreasing term, whole of life, over 50 plans…all better suited to covering different aspects of your life.
For example, decreasing term is great for covering a repayment mortgage, whereas over 50s plans are better for meeting funeral costs in later life.
However, each policy type varies in cost. Term-based cover, that only pays out if you pass away during the set term is always going to be cheaper than whole of life cover which does not have a term and lasts as long as you do, guaranteeing a payout.
It’s about getting the right policy to meet your needs, both now and in the future.
The final question is how best to compare quotes. Well, there is nothing stopping you from sourcing a range of quotes yourself and finding the best option, although this is very time-consuming.
Another option is to use a comparison website. This is very convenient as you can run a search at any time of day or night. One downside is that they are unlikely to compare a wide range of insurers, as some prefer not to be included on comparison sites.
Finally, you could use a broker to help you compare prices. The beauty of a credible broker is that you are able to compare a wider panel of insurers. You can also utilise their industry experience to your benefit, asking questions on which policy and why, unpicking the insurance jargon a lot the way.
What’s more, many brokers, such as Reassured, do not charge a fee to use their services.
So, what are you waiting for? Seize the day and secure your family’s future.
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