If you’re considering buying life insurance cover, you’ve likely come across the phrase ‘apply for a quote’. Thanks to the internet there are countless ways to get a life insurance quote online.  In this article, we’ll look at a few handy tips to help you when you apply. So how does a life insurance quote work exactly?

How do life insurance quotes work?

Before you can buy life insurance, you usually have to apply for a quote. This gives both you and the insurer an estimate of how much your monthly premiums will cost.

Depending on the insurer, you will usually need to fill in a type of a questionnaire where you will be asked questions such as:

Once you have provided your answers, the cost of your cover will be calculated. As you can apply for quotes online, the process should be done in a matter of minutes.

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1. Decide which type of policy you need

Before you apply for a quote, you should determine which type of cover is best for circumstances. Typically, life insurance pays out a lump sum payment to your family when you die.

Each month you make monthly payments to your insurer known as ‘premiums’. Ultimately, the type of cover you choose can determine the length of cover and cost of premiums. There are two main types of life insurance…

Whole life insurance

Also known as life assurance, whole life insurance covers you for the rest of your life (so long as you keep up with your premium payments). When you die a cash lump sum is paid out to your loved ones, providing financial support during this difficult time.

Generally, whole life policies are more expensive than a standard term life policy. Part of this is because you're covered permanently, so your family is guaranteed a payout no matter when you die.

Whole life insurance has two types of cover:

  • Balanced cover - The cost of your monthly premiums and payout amount are fixed throughout. This is especially beneficial for when you get older and have a higher chance of developing health conditions.

  • Maximum cover - Your policy is linked to an investment fund, in which they invest the money from your premiums. The goal is to make a return that covers the eventual pay-out amount when you die.

    Balanced cover can be a risky venture, if the investment performs, you can receive bonuses. However, if it fails your insurer can raise your premiums to cover the amount lost.

Term life insurance

Unlike whole life - which covers you permanently, term life insurance only covers you for a set period of time, also known as the policy term. This is agreed-upon with your insurer before taking out cover. As the standard form of life insurance, it pays out a lump sum if you die during your policy term. 

Term life insurance has 3 main types of cover:

  • Level term cover - The cost of your premiums and pay-out amount (sum assured) are fixed for the duration of your cover.

  • Decreasing term cover - (also known by insurers as mortgage life insurance) This can be used to cover large payments your family would struggle to pay off like a mortgage. As you make repayments, the value of your policy decreases over time. Your cover ends if you pay off the mortgage or reach the end of the policy term.

  • Increasing term cover - The pay-out amount of your policy increases over time to help protect the eventual value from inflation. However, you should be aware that your premiums also increase alongside the pay-out amount.

You can also get joint life insurance- this covers two people under a single policy, ideal for couples and spouses. Joint policies can often work out easier to manage as well as cheaper than two single policies. This is a great option if you and your partner share an income and both require financial protection.

Products & Services from the leading financial brands

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance
  • Scottish Widows

2. Asses how much cover will you need

Buying more or less cover than your family needs can lead to extra costs. Be sure to take into account any financial commitments you have that your family would need to pay off.

The pay-out from a life insurance policy can help your loved ones with finances such as:

3. Apply when you are young

If you’re looking for a cheap life insurance policy, it’s best to take out cover at the earliest stage. This is when quotes are at their lowest due to having a longer life expectancy and lower risks of developing health conditions.

Furthermore, taking out whole life or level term cover on a ‘Guaranteed’ basis means that you’ll pay the same for premiums throughout your cover - helping you budget for your monthly premiums in the long term.

4. Be honest with your answers

It’s important to answer any questions from your insurer 100% openly, honestly and as accurately as possible. You also should disclose any health conditions even if they seem minimal.

Altering details such as how long you’ve stopped smoking or not mentioning an illness or condition can have consequences. If discovered, your insurer can void your cover or deny your family a claim upon death.

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5. Apply for a quote with Cavendish Online

If you're looking for cheap life insurance quotes from the UK’s leading companies, Cavendish Online is here for you! We strive to provide our customers with the cheapest route for life insurance, with both ease and convenience. You can apply for a quote in minutes by using our online form.

At Cavendish Online, we offer 3 quick and easy routes to getting life insurance:

  • Route 1: Apply Online - Once you have applied for a quote you can choose from a list of insurers. This option is best suited if you know exactly what cover is needed and are in good health.

  • Route 2: Apply with Guidance - Have any queries about a policy and seek information? Then you can get in touch with our expert team on 01392 241 850. They can help guide you through the application process, to help you select the best policy.

  • Route 3: Apply with Advice - This route is best for those with pre-existing medical conditions, employed in high-risk occupations, or those who simply do not know what policy may be best for their needs. Our expert team can recommend the right policy for you and advise you on your options. Call our team on 01392 436 193.

For more information about the services and advice we offer, please feel free to get in touch.

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