Top 10 Tips For Life Insurance

Article published on 11th June 2015

With purse strings at their tightest it is often easy to think about doing away with 'non-essential' costs such as Life Insurance. However there are a number of ways that you can reduce your Life Insurance payments so that you can maintain this valuable cover at a cheap price.

Our top ten tips to securing cheap Life Insurance:

1. Give up smoking!

We know, we know, this is laboured to a point everywhere that you go. In relation to Life Insurance though it is a valid point when trying to get the best value for your money. Being a smoker greatly increases your Life Insurance premiums, most insurers will double the monthly premium of your cover!

In order to qualify for non-smoker rates you must have not used any nicotine-based products for at least 12 months prior to the Life Insurance application; this includes gum, patches, cigarettes, cigars, e-cigarettes. Etc.

2. Paying more does not necessarily make it a better policy!

You do not have to pay your own weight in gold to get the best Life Insurance policy available to you. If you use a broker they can place your application with the best insurer for your circumstances: age, smoker status, health, occupation, travel, hazardous pursuits.

3. Use an online Life Insurance comparison website

Just like you do for your home, travel and car insurance, you should use an online comparison engine to give you an idea as to where you should be placing your Life Insurance.

By using the Top Quote Online website you can compare a fair analysis of the whole of the market for in just a few seconds, allowing you to clearly see which insurer will offer you the most value for your money.

4. Be cautious of offers from Banks, Building Societies and Mortgage Lenders

Banks, Building Societies and mortgage lenders are often tied to specific insurance providers and the premiums that they can offer you are a set price. We have found that the quotes they provide can be 50% more than the monthly premium of using a broker!

By all means get a quote from your bank but we would suggest that you take their quote and ask to have a think about it before you commit to it. You can then go home and use our online comparison engine to compare the quote you have been given in-house to that online. You may well find that you can source a Life Insurance policy online with the same insurer that your Bank offers, at a much lower premium.

5. Use a whole of the market website

Make sure that any online comparison site that you use is offering a predominately whole of market perspective. You should look for a site that offers comparisons from a range of insurers; for example AIG, Aviva, Friends Life, Legal & General, VitalityLife, etc.

6. Don't take excessive amounts of cover

You may be sat there thinking that you are worth £5 million and whilst that would be a lovely amount to leave your family, it is best to be a bit more realistic. The more that you insure yourself for and the longer term that you use, the higher your policy premiums will be.

For starters it is a good idea to look at the liabilities that you have and choose a Life Insurance policy that will cover these essentials: mortgage, loans, private tuition fees. Once you have a figure in mind use an online comparison site like Top Quote Online to find out how much the Life Insurance policy would cost you per month. If you find that the monthly premium is too much or well within affordability you can then easily play about with the amounts online to establish the sum assured and term of a policy that suits you.

7. Use an advice driven service without a fee

Firstly, consider why you are reading this article. If may be because you want some advice.

Secondly, whilst you can use an online guide to give you advice nothing beats talking to someone who knows what they are on about. An Insurance broker lives and breathes these policies and will be able to tell you all the nitty gritty aspects of the policy that you need to hear.

Thirdly, do not pay a fee for your advice! Most brokers will be paid a commission from the Insurance Provider that you place your Life Insurance with, meaning that you do not pay anything to the broker yourself just your monthly premium to the Insurer.

8. Act now!

Do not leave your Life Insurance to another rainy day! The older you get the more expensive your Life Insurance policy will become, some insurers will even increase premiums at quarter and half birthdays.

Also the longer you wait the more chance there is of you being diagnosed with a condition that may increase your policy premiums e.g. diabetes, stroke, heart attack, etc.

9. Avoid over 50 plans unless you cannot get normal life cover

Over 50s plans are advertised here there and everywhere as a cheap alternative to Life Insurance once you are 50+. This is not the case!

Over 50s policies can be applied for without medical underwriting but you will pay a higher monthly premium for this. So if you are fit and well you may as well apply for a regular Life Insurance policy whether you are 50, 60, 70 or every 80 years of age.

Over 50s policies also have an initial exclusion period of one to two years, meaning that should you die in this time period your policy will not payout the sum assured.

10. Consider writing your life Insurance into trust

A trust* is a legal document that directs your Life Insurance policy payout to your intended recipients, quickly and without the need for probate.

You can get a solicitor to write your policy into trust* but this can cost you. Some Insurance brokers do not offer this service and will tend to direct you to their partners who will charge you for the services.

Most insurance companies provide trust templates that are straightforward to complete.

*The Financial Conduct Authority does not regulate trusts

So that is our top 10 tips for affordable Life Insurance! Why not take a quick browse of our online quote system to see just how cheap Life Insurance could be for you!

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