Paying too much for your premiums?
Securing life insurance cover that meets your unique needs is crucial, but it is also important to make sure you are not overpaying.
With so many UK insurers and policies available, finding the right policy can be difficult.
At Reassured our dedicated team is more than happy to help review your current circumstances and make sure your policy is just right – if you need our help call 0808 168 2025.
However, if you just want to do some research yourself on how best to save money on your premiums, we have compiled some key points below.
Does your policy still meet your needs?
As we grow older, our circumstances change: children leave home; mortgages are paid off; large sums inherited.
As our needs change, it is important that we review our life cover. It could be that you are unnecessarily overpaying on your premiums?
Life insurance policies are grouped into 2 main categories: fixed term and whole of life. Fixed term policies last for an agreed length of time and ideal for those wanting to protect themselves until their mortgage is paid off, they retire or the children are independent.
Whole of life cover, as the name suggests, is a policy which lasts until you die. Whilst this cover is more expensive, it is a great option for those who want to leave their loved ones with a guaranteed inheritance and avoid having to renew their policy.
You could also make a saving if you were to select the cheaper option, decreasing term. With this type of life insurance, the amount paid out reduces over time, making it perfect if you just want to cover a repayment mortgage.
Is it the right term for you?
Choosing the right term means deciding what you want your life insurance to do for you and your dependents.
Selecting a term which is too long or too short could mean you are either unnecessarily overpaying for your policy or you are not properly covered at a time you need protection.
As a general rule, the shorter your life insurance term is, the less your policy will cost. If you need it to run while your mortgage is being paid, you might be suited to a 25-year policy.
If you just want cover whilst your children are home, you might be able to settle for a shorter term.
The key is understanding your specific needs and securing the right term length for you.
Have you chosen the right sum assured amount?
The amount you are insured for will have a significant impact on the cost of your premium.
If you are looking to save money on your life insurance, simply do not buy cover you do not need.
If you have a £250,000 mortgage and primarily want your policy to cover that, there is no point in paying out for £500,000 worth of life cover.
Also, if you are employed, you should check what benefits your employer offers. Some offer a ‘death in service’ benefit which could pay out a lump sum to your family of up to 4 times your annual salary.
Are you with the right insurance provider?
There are hundreds of insurers and many of them only have small differences in the cover they offer.
Getting to know which ones are best suited to your needs is vital, otherwise, you could be paying for something which will not protect you properly.
In some cases, different insurance providers can offer identical cover, but for very different prices. For this reason, it is essential you compare quotes to secure the best possible price.
Our Reassured team will happily help you find a policy that meets your exact needs, but for the most affordable price.
Do you smoke?
If you smoke, all other things being equal, your life insurance premiums will be higher.
However, if you give up smoking, you could be able to obtain a reduction in your premium cost by declaring this to your insurer.
In some cases, it can even be prudent to cancel your insurance policy and restart with a different provider as a non-smoker in order to secure the lowest premium.
In life insurance terms, you are only a non-smoker if you have abstained from all nicotine-containing products for at least 12 months. This includes the use of patches, gums, and electronic cigarettes.
Also, if you have dramatically reduced your alcohol consumption you may be able to secure lower premiums. Call your insurer, or us, and pose them the question.
As we know, insurers ask for your height and weight measurements on application, to establish a BMI score.
If overweight, you are statistically more likely to suffer from certain illnesses, like type 2 diabetes, heart disease, a stroke, which could affect life expectancy.
Subsequently, if you have improved your lifestyle and lost weight, you may be able to secure a cheaper premium.
Considering joint life cover?
It is easy to think that because you have a joint bank account and a joint mortgage, you should get joint life insurance too. However, this is not always the best option.
Joint policies are usually slightly cheaper than taking out 2 single policies, however, remember they will only pay out once, (upon the first death).
If you have no children or dependents then this may be a worthwhile saving, but again this depends on your individual circumstances.
Take out a life insurance policy while you are young
One of the best ways to save money on your life insurance is to take out your cover while you are young.
As you age, the price of your life insurance will increase substantially, and if you develop any serious illnesses during that time, you could pay significantly more.
Do not wait until reality bites. By taking out cover while you are still young and healthy you could save significant amounts over the term of your policy.