3 steps to cheaper life insurance - Video script
John Fitzsimons looks at three simple ways to cut the amount you spend on your life insurance.
John Fitzsimons looks at three simple ways to cut the amount you spend on your life insurance.
Life insurance is an absolutely crucial outlay if you have any financial dependents. Should something happen to me, I want to be sure that my wife isn’t left out of pocket as a result. But that doesn’t mean that I want to be spending more on my life insurance than I need to be.
Thankfully, there are things you can do to keep your life insurance spend to a minimum.
#1 Pay for what you need!
When taking out life insurance, you have a couple of big decisions to make straight away. Do you want level term assurance, which will pay out the same lump sum whether you die in year one or right at the end of your policy, or the cheaper option of decreasing term assurance. As the name suggests, decreasing term assurance means that the amount of cover you have decreases throughout the term of the policy – a good idea if you just want to cover a repayment mortgage.
You’ll also need to decide how much cover you want, and for how long. We have an online life insurance calculator to help you make these decisions. The choices you make will affect how much your policy costs you, so only pay for what you need!
#2 Shop around and switch
Even if you already have life insurance, you should still shop around so you can switch if you find a more competitive policy!
Just go to lovemoney.com/lifeinsurance and by entering just a few details you’ll soon have access to a range of quotes which might just be better than your existing deal.
#3 Get healthy!
And finally, a very simple way to cut how much you spend on your life insurance is to be as healthy as possible. My broker explained to me that the reason my own insurance costs more than he expected was because of my height/weight ratio – in other words, I’m carrying too much timber.
Similarly, if you smoke your premiums will be a fair bit higher. So if you can quit the fags, you’ll save a fair few quid!
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As long as they pay out on that heart attack that you have on the running machine whilst trying to reduce your payments!
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Hi Iniq, Thanks for your response. Well I think my dad is well cover by work (civil service) for illness but thanks for the suggestion! :) Chris
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Far more important than life insurance is Income Protection Insurance. Everyone (unless they are retired) needs income protection insurance, but if you have ne dependents you do not need life insurance. You are three times more likely to be permanently incapacitated by illness or accident during your working life than you are to die, and that would be a far greater disater for your family. If you die, your wife could go out to work or even re-marry. If you were lying at home in a coma she could do neither. The only reason why life insurance is promoted so energetically and Income Protection Insurance is not is because life insurance is simple and profitable to sell compared with Income Protection Insurance.
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03 June 2010