Finding the right life insurance policy can be confusing, so we've put together a selection of life insurance tips to help.
Regularly review your life insurance policy
and amend it if your circumstances change. Examples could be the birth of a child, a change in occupation or an increase in your debt.
Cover your main debts
and outgoings, from mortgages and loans to outstanding credit card debts.
Put your life insurance policy in trust
. This ensures that any pay-outs made on your life insurance policy will not be subject to inheritance tax. You only need to fill in a few forms and it's completely free. Your life insurer can guide you through this process.
Snap up a good life insurance deal if you see one. When it comes to the price of the best life insurance policies, age works against you, so it's typically cheaper to buy life insurance when you're younger.
Don't accept the rate offered by your mortgage lender.
Often people ask if they need life insurance to get a mortgage. To get a mortgage you will usually need life insurance if your children or partner rely on your income to pay the mortgage; however mortgage lenders can offer overinflated prices. Get your life insurance policy separately and make sure you find the lowest price you can.
Don't forget to factor in future costs.
When calculating how much life insurance you need, don't forget to factor in your children's school fees, potential university fees, home improvement costs etc. But try not to overestimate, as this can result in higher premiums.
Don't underestimate the value of a stay at home parent.
Legal & General released a report revealing that replacing the work of a full time mum can cost upwards of £32,000 a year.
Don't buy joint life insurance if you don't need to.
It used to be the case that it was significantly cheaper to take out a joint life insurance policy with your partner. However in some cases this is no longer true, so it may be worth looking into two separate policies. This way, if one policyholder dies, the other policyholder can keep their policy. Effectively, this means that you get double the cover for your money.
While life insurance is not a legal requirement for a mortgage in the same way that car insurance is needed before driving a car, many lenders will not let you borrow without it.
In the event that you die before the mortgage is paid, then those still living in your home will be covered by the life insurance – otherwise your home could be repossessed, so it's perhaps better to consider life insurance with a mortgage anyway.
So now you know the dos and don'ts of buying life insurance, compare life insurance policies online to find the right one for you.