Life insurance quotes are designed to pay your family a lump sum in the event of your death. Whilst many people consider life insurance (otherwise known as life assurance) an essential product, finding life insurance quotes that suit you and your budget can be a bit of a challenge.
Here is our beginner’s guide to life assurance to help make that process simpler and hopefully pain-free!
Choose how much you want to spend on your life insurance quotes
When looking for any type of insurance it is essential to decide on a budget first. Life assurance premiums are some of the cheapest on the market, starting from just? $5 a month. However, there are certain factors that are guaranteed to raise the price. For example, the size of the lump sum payable on death (the ‘sum assured’) plays a large factor in the cost of your premiums. The more money you want to be paid to your family, the higher the monthly charge. In addition, lifestyle factors like your age, state of health and your smoker status will affect the cost of your life insurance quotes- bringing us nicely to my next point:
If you are a smoker then the first thing you should try and do before shopping for life insurance quotes is to kick the habit. It is not a myth that life assurance premiums are more expensive for people who smoke- smokers really do pay more because they have a lower life expectancy. If you have used any tobacco products in the 12 months prior to your application then you will be classed as a smoker. And don’t try and lie either to get cheaper premiums, because your insurer will probably refuse to pay out if it is discovered when assessing a claim. You may even be asked to take a saliva test to confirm your smoker status on application.
What type of life insurance do you need?
Since life insurance is only designed to pay your family a lump sum if you die unexpectedly, you would think that life insurance quotes are mostly like for like. Unfortunately, it is a bit more complicated than that! There are two main types of life assurance: term assurance and whole-of-life policies. With a term assurance policy you choose a date that you want to be covered until, such as retirement age or when your children leave home. If you die before that age then the insurer will pay out. If you do not die before that age, your family will not be paid and you will not have your premiums refunded. In contrast, whole-of-life policies cover you for your entire lifetime. Whole-of-life policies are more expensive than term assurance because the insurer is guaranteed to have to pay out.
Do you want critical illness cover?
Another factor to consider when looking for life insurance quotes is adding critical illness cover to your policy. Critical illness cover is designed to pay a tax free lump sum on the diagnosis of one of a number of predefined serious illnesses, which usually include cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. The money can be used for whatever you like, whether that be paying of your mortgage or loan if you are unable to work or pay for private care. It is usually cheaper to combine critical illness cover with your life assurance. By combining a critical illness benefit with a life insurance policy, you will be ensured a lump sum either on death OR on the diagnosis of a predefined critical illness.
Compare the market
As you can see from above there are a lot of different types of life insurance quotes, and unless you compare them all you could be missing out on a great deal. Instead of searching each life insurer individually use a life insurance comparison website to get quotes from across the market. This way, you will be guaranteed to get the best policy at the right price. In addition, online comparison websites often have exclusive deals with the life insurance companies that you just won’t get by going direct.
Another bonus of using a comparison website is that you may find a product that suits you better than life assurance. For example, if you are single with no dependents then life assurance may not be a wise investment at this point in your life- you may want to compare the income protection insurance market instead to find more relevant cover.
Keep on switching
Hopefully, if you put these tips into practise you will find life insurance quotes that are perfect for you. But even once you have found your ideal policy, you must continue to review the market every year or if your circumstances change. It is very easy to lose money by sticking with the same insurer.
Reasons to look around the market include quitting smoking, moving house or getting married. And even if you don’t make big changes, search the market anyway just in case! Buying through a good life assurance comparison website is a great way to ensure you are always paying the lowest possible price because they will carry out annual market searches on your behalf.