Protect your family and/or loved ones without breaking the bank
If you're on a tight budget, you may think you can't afford life insurance. But the truth is, there are plenty of ways to buy life insurance without breaking the bank.
In this article, we'll look at what factors affect the cost of life insurance. As well as how to shop around for the best rates and the policies that are best for budget-conscious shoppers.
What is life insurance?
Life insurance can be a critical component of any financial plan. It could provide peace of mind, that your family and/or loved ones will be financially protected in the event of your death. With life insurance, you can choose the amount and duration of cover to meet your financial needs, whilst also protecting your dependents in case the unexpected happens.
How does life insurance work?
Life insurance is a plan that covers you as the policy holder. If you were to die, your insurer would pay out the death benefit to your designated beneficiaries. This could be your close family members, such as a spouse or children.
Each month, you will pay a premium to keep your policy in force. The cost of these premiums often depends on factors such as your age, health, and the type of policy among other things.
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Determine your budget
Before you shop, it's important to determine your budget. Decide how much you can afford to spend on premiums each month. This could help you narrow down your options and find the best policy for your needs and budget.
One way to do this is to use an online calculator or speak with an adviser. They may be able to estimate the amount of cover you need and how much it will cost each month.
Understand your needs and goals
Once you have an idea of the amount of cover and budget, it's time to understand your needs and goals. Take some time to think about why you need life insurance and what type of policy would best meet your needs.
Ask yourself:
- Do you want to provide for a surviving spouse, children or other dependents in case of your death?
- Are you trying to protect your family's retirement savings?
- Are you looking for a way to provide for death-related expenses, such as funeral costs?
- Do you have any large debts, like a mortgage to pay off?
Taking out insurance that only covers what you actually need will help keep the cost down. And if that number is still too high, remember that compromises can be made and that something is better than nothing.
Opt for a smaller benefit amount
Another way to get affordable life insurance could be to take out a small amount of cover, as opposed to a larger sum. This may keep your premiums low while still giving you the protection you need. Just make sure that the amount of cover you choose is as close to your needs and goals as possible. Some cover is better than no cover.
Choose the right type of policy
There are several types of life insurance policies on the market. Each type has its own benefits, so it's important to find one that fits your budget and meets your needs.
Term life insurance policies are typically the most affordable option and provide cover for a set period of time. While premiums are typically cheaper than other types of cover, you are only protected for the pre-set term, usually between 5 - 50 years.
Whole life insurance provides permanent cover, meaning that the policyholder is insured for their entire lifetime.
This type of policy might be a great option for those who want to make sure that their family and/or loved ones is taken care of, no matter what happens. However, premiums for whole life policies tend to be more expensive than term life as a result of the guaranteed payout.
It is also possible to pay in more than the policy is insured for, depending on how long you have the plan for. Other options can include:
- Joint life insurance - ensures cover for two people under a single policy. This way both parents/guardians could be protected in the event of the other's death. This may also be cheaper than taking out separate policies.
- Critical illness cover - could protect you financially if you are diagnosed with a serious illness or disability. This may cover any payments affected by your inability to work. This policy usually also covers death for no additional charge.
Shop around
No matter which type of policy you choose, it’s crucial to understand what you are covered for and how much your premiums will be. It's also a good idea to compare different policies from different insurers to make sure you're getting the best deal.
Review your policy regularly
Your needs may change over time due to life events, such as losing your job, marriage, the birth of a child, or changes in income. Therefore, make sure that your cover is still enough to meet your needs and goals.
At Cavendish Online, when you buy with one of our advisers, we’ll automatically place you on an annual review scheme. We’ll get in touch every year to check that your policy is still adequate, and look into alternatives if it’s not.
Get all the advice you need from Cavendish Online
Working with an experienced life insurance broker can be invaluable in helping you find the best policy for your needs and budget. By speaking with a knowledgeable adviser at Cavendish Online, you’ll gain access to expert advice and tailored quotes - making your search much easier.
Or, if you know exactly what you need, you can apply for an online quote through our website in just a few minutes.
Speak to the experts...
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
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