Life insurance is essential for anyone with dependants to provide them with financial security. uSwitch Insurance expert Mark Monteiro, explains who needs life insurance and how to get the right low cost life insurance policy.
Everyone with dependants needs life insurance to protect their family if they die. There are several things you can do to keep the cost of life insurance to a minimum and make sure you have the right policy. Here we explain how to get a cheap life insurance policy while making sure you get the right cover.
What affects the cost of life insurance?
Life insurance (also known as life assurance) can protect your family in the event of your death and pays a lump sum within the length of the policy, say 20 or 25 years, or until retirement. There are two types of life insurance policy - level term and decreasing term insurance.
Level term life insurance pays out the same amount throughout the length of the policy. With decreasing term life insurance the amount the policy will pay out on death reduces in line with a mortgage. This means that decreasing term policies offer cheaper life insurance than level term policies, but the amount they pay out reduces over time.
A couple can choose to buy a joint life insurance policy or two separate policies. Although a joint policy will be cheaper than two single policies, in the event of one partner dying, a joint policy will pay out and the policy will end. With two separate policies the remaining partner will still be covered.
Smokers will pay more for life insurance than non-smokers. If you smoke you could save money on life insurance by giving up. Normally, you will be eligible for a cheaper life insurance policy once you have stopped smoking for a year.
The older you are the more you will have to pay for life insurance. As premiums are normally fixed for the length of the policy, you should take it out sooner rather than later to get the cheapest price.
Like all insurance you can find cheap life insurance quotes by shopping around. You must disclose your medical history fully, if you don't you risk having limited or no cover. Make sure you buy from a regulated company and read the terms and conditions and keyfacts documents.
Top tips for getting cheap life insurance
There are some things you should do to make sure you're getting the right life insurance cover for the cheapest price:
- Always tell your insurer about your medical history - if you don't you may not be covered.
- Two separate policies for couples means cover will carry on if one partner dies.
- Non-smokers pay less for life insurance than smokers - so giving up could save you money.
- Shop around for cheap life insurance quotes - premiums vary and you could save lots of money.
- Choose the right policy and right amount of cover - check if you have cover already with your employment or mortgage - don't pay for cover you don't need.
Compare life insurance policies with uSwitch today.