How To Save Money On Life Insurance
Have you ever looked at your life insurance premiums and been in shock? If so, you’re not alone. Thousands of people across the UK are similarly confounded about why they have to pay so much to cover an eventuality which, frankly, seems pretty unlikely.
In this article, we’re going to address the issue of life insurance premiums head-on and find out how to save money. Check out the following.
The internet has made it incredibly easy for people to find out just how much their life insurance policy costs compared to others on the market. More often than not, people find that they can get just as much cover, if not more, for lower monthly premiums.
If you want to keep total costs down, avoid buying insurance through financial advisors. These professionals get a commission for signing you up for more expensive policies while providing no extra cover.
Switch Your Insurer Regularly
The way most life insurance products work is similar to how other insurance products work. So long as you keep paying your monthly premiums, you’re covered. Life insurance isn’t like a pension: you don’t just keep paying into and watch the payout go up that’s fixed during the initial agreement. All you’re doing is paying for cover, should the worst happen.
Because of this, nothing is stopping you from canceling your policy after a couple of years and looking for a better deal elsewhere. Most life insurance policies are the same, but your insurer may attempt to increase the cost of insurance, the longer you stay with them.
In all probability, your health won’t have deteriorated since you took out cover, so looking for a new policy from another provider could bring your premiums down.
Smoking is one lifestyle factor that practically everyone can agree is bad for you. It shortens your life and worsens your health over time. It’s dangerous.
Life insurance companies usually want to know if you’re a smoker or not. If you are, they’ll take that as an opportunity to charge you more. The differences in premiums can be astonishing. While a healthy 35-year-old woman might pay £12.50 for £200,000 worth of coverage in the event of her death, a smoker might have to fork out £23.10 – nearly double.
Buy Tax-Efficient Life Insurance
Many businesses offer relevant life insurance. The purpose of this kind of insurance is to provide individuals with a lump payout if they are diagnosed with a terminal illness, or pay their families a sum of money should they die suddenly. The great thing about relevant life insurance is that it’s tax efficient. Business directors and others do not have to include it in their “lifetime allowance” and so “death in service” payouts are essentially tax-free
It’s worth pointing out, therefore, that a relevant life insurance plan through a company often works out much cheaper than a regular life insurance policy. It’s a tax-efficient benefit paid by the employer to the employee. You can’t, however, take advantage of relevant life insurance if there is no employer-employee relationship.