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When it comes to buying life insurance, the younger you are, the less expensive it will generally be. However, younger people often tend to put off buying life insurance due to other financial concerns, such as car finance, student loan repayments and paying a mortgage. While paying bills is critical, missing out on buying life insurance at a young age can be costly, much like delaying saving for your retirement.
As you get older, medical conditions are more likely to develop and if a serious medical condition arises, so would the costs of taking out a policy or even the possibility that you may be ineligible for cover at all. So, the sooner you decide to purchase, the better. ‘Term’ life insurance is affordable, but if you are particularly cost-conscious, a policy with a shorter term or lower sum assured will keep costs down.
Ultimately, it's better to have a safety net with a shorter duration than no net at all.
Apart from age, there’s also other factors that affect the cost of life insurance, so we’ve put together the following points to understand how to keep the costs of life insurance down:
1. Live a healthy lifestyle – we all know what’s bad for us, so avoid drinking, smoking and try to keep fit and well.
2. Compare a range of policies and take your time - check out the policy features and exclusions too, don’t just think about the price.
3. Think about long-term affordability - the longer you live, the longer you’ll be paying premiums, so be budget-conscious before you commit.
4. Take out cover when you’re young - typically the younger you are when you take out the policy, the cheaper your premiums will be.
Like any insurance, you may only appreciate what good value it is when you consider a particular scenario if you didn’t have any cover in place. Look for low-cost life insurance now with Cavendish.
KEY POINTS
If others depend on you financially - or you have debt - it's important to have life insurance in place.
The best type of life insurance policy for you depends on your individual situation. Know the difference between ‘term’ and ‘whole-of-life’ policies to choose what’s best for you and your family.
The sooner you purchase life insurance, the better, as it becomes more expensive every year due to your age and the increasing likelihood of medical conditions.
Having ‘some’ cover in place is always better than putting it off to take out your ‘ideal’ level of cover.
The best cover for you should be chosen based on understanding the options available and making an informed choice on what you think is best for your family and circumstances, both now and how they may likely be in the future. Knowing what type of insurance is best for you is also very important and the difference between ‘term’ and ‘whole-of-life’ policies.
‘Term’ life insurance covers you for the term of the policy (hence the name). While taking cover out younger is generally better, you'll want the term of the policy to last at least as long as your dependents require your income or whilst you have a large outstanding debt, for example a mortgage.
If two people in a couple are earning an income that is crucial to the family, then both should be covered. However, if you’re a parent with a partner who’s a dependent (who isn’t a financial contributor to the household) were to pass away, you may want to also consider if just one of you could realistically maintain the same working schedule after the loss of your partner - with considerations to the cost of childcare, maintaining the household and other daily family commitments. That’s why it’s important to always consider covering both partners with life insurance policies, either individually or both on a joint policy.
In contrast, ‘whole-of-life’ policies are usually taken out by people who may no longer have dependents, but it can help your family deal with bills associated with inheritance tax when you die, and if you’re determined to leave some form of inheritance to your family.
Whatever your situation, there’s always no better time than now to take out life insurance cover, so speak to Cavendish Online today who can help guide and support you in choosing the right policy for you and your family on 01392 241 850.
