One fact of life is that, sadly none of us gets to choose when our time is up. While protecting our loved ones is at the forefront of our minds when buying life insurance; the potential costs are a key consideration too. Thankfully there are several ways to get cheap life insurance, so you can ensure your family is cared for in the difficult times ahead.
But first, what are the main types of life insurance available?
Main types of life insurance
If you’ve started your search for life insurance you may already be familiar with the two main policy types - whole life insurance & term life insurance. The main differences between these two types of cover are the cost and length of policy.
Whole life insurance
Known by insurers as ‘life assurance’, this type of cover protects you for the rest of your life. When you die, your family receives a cash lump sum to support them in this challenging time.
The value of your payout is fixed throughout the policy as well as the cost of your monthly premiums. It’s important that you keep up with your monthly payments or your insurance provider will end your cover.
Though this is typically the most expensive type of life insurance, the benefit is that your loved ones receive a pay-out no matter when you die - so long as you keep up with your monthly premiums!
Term life insurance
Unlike whole life insurance, term life insurance only covers you for a set amount of time (i.e 20 years or so). Your family will only receive a pay-out if you die within this timeframe - known as the policy term.
Level term cover
As the standard form of term life cover, the eventual payout has a fixed amount. The cost of premiums also remains the same throughout the length of your cover.
Decreasing term cover
Commonly known as mortgage life insurance, this type of protection can be used to cover your mortgage and other large payments. The value of your payout decreases over time - usually by a fixed percentage stated at the start of your policy.
Increasing term cover
Your policy’s payout amount increases overtime to protect its value from inflation. Because of this your premiums may also be increased over the term of the policy, potentially making this policy type more expensive than other forms of term life cover.
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How can I save money on life insurance?
Protecting the people we care about most shouldn’t leave us out of pocket. Luckily for us, there are a number of ways we can cut the costs of our policy.
1. Buy life cover at an early stage
Naturally, as we get older our life expectancy decreases, therefore leading to a rise in the cost of life insurance. In order to save money over the long term, it’s best to take out cover at an early stage.
2. Choose the right amount of cover
No matter which policy you decide to take out, it’s important that you assess the financial needs of your family. There’s no need to pay towards a larger pay-out amount if your family can still get by with less.
If you are unsure about how much cover you and your family may need, why not consider speaking to an adviser, who can make recommendations based on your current situation.
3. Consider getting a joint policy
Joint life insurance is popular amongst many couples and long-term partners. It covers two people under one policy, often making it both cheaper and easier to manage.
If you and your partner or spouse share the joint financial responsibility of your household it may make sense to take out a joint policy. Though remember, if a claim is made on a joint life first death policy and the policy pays out; the surviving partner will need to apply for a new policy if they still require life insurance cover.
4. Don’t smoke
It’s well known that smoking is damaging to your health, not to mention your wallet. Most insurers charge extra for premiums if you are a smoker due to the significant decrease in life expectancy it causes.
Therefore it’s best to give up as soon as possible not only for your health but also from a financial perspective. Some insurers may reduce the cost of your premiums if you quit and manage to stay smoke-free.
5. Opt for a term life policy
As mentioned earlier, term life insurance is one of the cheapest options for life cover. Although it doesn’t provide permanent protection like whole life insurance, it is much more flexible both in cover and cost.
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Why buy life insurance?
When it comes to life insurance, there are more reasons to buy cover than not to. Sadly death is something we cannot prevent, but we can plan for it, ensuring our loved ones are supported for the future.
Among many things, the pay-out from a life insurance policy can be used to support your family with finances such as:
Everyday living costs
Household bills
Outstanding debts
Rent or mortgage repayments
Funeral costs
Childcare support
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If you’re looking to save money on life insurance why not apply through Cavendish Online?
We’ll help you find an affordable policy that matches you and your family’s needs. It takes just minutes to apply for a quote through our easy-to-use online application.
Or you can opt to speak to one of our friendly life insurance experts over the phone today on: 01392 43 61 93
