7 ways to help cut the cost of life insurance

As well as shopping around for cheap life insurance, there are other ways to help reduce the cost of your life cover.  

As well as shopping around for cheap life insurance, there are other ways to help reduce the cost of your life cover.  

Kamran Altaf
From the Life team
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Posted 2 SEPTEMBER 2019

1. Get the right cover for your needs 

Life insurance is there to provide for a financial need; the pay-out will never replace the life lost. To get the right amount of cover for you, you need to work out how much financial support would be needed if you weren’t there.

Consider how much it would cost to cover the mortgage, bills, your children’s education and other outgoings, and how long would this financial support be needed for? Think carefully about this, as while you don’t want your dependants to be struggling on their own, neither do you want to be paying excessive life insurance premiums that provide more of a pay-out than your dependants need.  

 2. Consider term insurance vs whole of life insurance

Term insurance is a policy that pays out if you die within a specific time frame – be it five, 10, 20 or 30 years. Over the course of this time, you’ll be paying monthly or annual premiums. If you die within the term, then your dependants will be the beneficiaries of the policy.

With whole of life insurance, such as over 50s policies, you agree to pay premiums for your whole life – although many insurance providers will stop taking premiums once you turn 90 years of age. However, this type of policy is guaranteed to pay out whenever you die.  
Term insurance can work out less expensive than whole of life. 

3. Consider joint vs single cover 

If you have a partner, it can be worth comparing separate and joint quotes for life insurance, as you may find that joint policies work out cheaper.  
Joint life insurance covers two people and pays out once. Generally, this is when the first person in the couple dies, but you can get joint life insurance set up on a ‘second death’ basis, in which case it will pay out when both people in the couple die.  
Before deciding on a joint policy, you’ll need to check whether it offers the cover you really need. And bear in mind that if one of you has a pre-existing medical condition, this will affect the cost of the premium. 

4. Get fitter 

The healthier you are – if you’re a non-smoker, you moderate your drinking and get plenty of exercise – then you’re less likely to die young. Some insurance providers are using data to help with managing their risk, and they’re issuing policy holders with fitness trackers so that they can prove the steps they’re taking to maintain healthy lifestyles.

5. Start younger

Combined with getting fitter, taking out life insurance while you’re younger gives you a better chance of reducing your premiums. Simply put, the younger you are, the less likely you are to die. 

6. Don’t double up on cover

Some employers offer death in service benefit that pays out to people chosen by you – your beneficiaries – if you die while working for them. If you have this benefit through work, make sure you know exactly what it covers so that you don’t double up when you take out a life insurance policy. 

7. Compare policies  

Don’t feel you have to go with the first life insurance policy you come across. Once you’ve decided what type of policy you need, it’s worth comparing what’s out there to find a great deal for you.  

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