Whether you already have life insurance and are revising your cover, or you are looking for your first life insurance policy, then it makes sense to get the most cost-effective deal for your needs.
Here are 9 quick tips on how you could save money on your life cover.
- If you are a smoker, then you will typically pay more for your life cover than if you don’t smoke. This is because of the additional health risks faced by smokers. If you want to get cheaper life cover as well as live a healthier lifestyle, then sign up to the NHS website Smokefree for tips and help on quitting.
- See what other policies you have in place that may mean you need less life insurance cover overall (for example, a company scheme or a life insurance savings policy). There is little point for paying out more for cover that you already have elsewhere.
- While not exactly a money saving tip, your loved ones can benefit from paying less inheritance tax upon your death if you write your life insurance policy under Trust.
- If you have no mortgage or other commitments but want to leave a small legacy for your family in the event of your death, then you may wish to consider an over 50 life cover There are a number of plans aimed at the 50plus age group, including policies with guaranteed acceptance and no medical required. While the sums insured with these are relatively small (around £2,000-£10,000 is not an uncommon amount), they could do the job if you don’t want – or cannot get – traditional life cover. Do note that, as with some other life insurance cover, the policy only runs for a term (typically up to 80-85 years of age). If you die after the term has ended, your family will not get anything.
- Has there been a change in your circumstances? Maybe you were in a high-risk job or had a dangerous hobby such as diving or rock climbing. If you have changed jobs or no longer sky dive / rock climb etc. for fun, then, your premiums may be reduced as you are perceived to be less of a risk.
- Get life insurance while you are young. The younger you are when you take out your cover, the cheaper your premiums may typically be.
- Check whether the sum insured on your existing policy is correct. If it is too high for your current (and any projected) requirements, then, you may want to reduce the amount and pay less. This is less likely to be the case for younger policyholders, as they may move to a bigger house as their family grows and so need a higher sum insured than someone who is in their 40s or 50s and who typically has less financial commitments.
- Is the policy term still right? If not, a shorter term means you may typically pay less in premiums.
Finally, life insurance premiums are cheaper now than they were a decade or two ago – it may be worth shopping around and comparing policies to see if you could be paying less for the same level of cover.