Life Insurance Buying Mistakes

If you’re planning on making an exciting purchase like a new phone or gadget for the home, there’s a fair chance you’ll spend a few hours researching your options - wanting to know all the features and making sure you’re getting a good deal. There’s also a fair chance that you probably wouldn’t want to devote as much time to buying an online life insurance policy though.

However, we all know that life insurance is a far more important purchase, so rushing the process could really cost you in the long term.

Don’t put off buying life insurance

Don’t delay. When it comes to buying life insurance, the younger you are, the less expensive it will generally be. If you have other people who depend on your income and you don’t already have life insurance in place, it’s really important that you consider taking out a policy as soon as you can.

Don’t assume that life insurance is too expensive

There are plenty of low-cost life insurance options out there - so you might be surprised how inexpensive it is - in fact, for many people, it could cost you less than a single takeaway a month.

Don’t just rely on life coverage through your employer

If you have life cover through work, you can’t always assume that the cover you have is adequate. Death in service benefit could certainly go towards helping your family, however it might not be enough to cover everything. It’s also worth noting that this cover will likely stop if you were to leave your company, so keep that in mind.

Don’t assume you’re ineligible due to health conditions

Different insurance companies each have their own guidelines for what can be underwritten. Some may be more lenient than others about particular health issues. Shopping around is the best way to make sure you’re getting a good deal.

Cavendish Online may also be able to help find you cover if you have existing health condition through our professional and friendly advised service, so consider speaking to an adviser if this concerns you.  

Don’t hide information from the insurer

When you apply for life insurance, you’ll be asked a variety of questions about your health and lifestyle. It’s important to answer the questions honestly, as incorrect answers could invalidate any claim being made on the policy.

Don’t underinsure

You shouldn’t go light on coverage, just to save money. To work outhow much cover you might need, consider what would need to be paid in the event of your death, such as replacing your income, paying off a mortgage and also future considerations you’d plan for any children you may have, such as University fees.

Know what you’re buying

The two types of life insurance policies you’re most likely to come across are ‘term insurance’ (the more basic form of life insurance) and ‘whole-of-life’.

‘Term’ life insurance policies run for a fixed period of time (known as the ‘term’ of your policy) eg. 10, 15 or 25 years - but only pay out if you were to die during the term of the policy. There’s no lump sum payable at the end of the term.

With a ‘whole-of-life’ insurance policy, the clue is in the name. Unfortunately, we all die one day, so as this policy is ongoing, it will pay out a lump sum whenever that day comes.

Naturally, these policies are typically more expensive than term insurance policies since as long as you keep paying your premiums, the insurer will always have to pay out, whereas you may outlive a term insurance policy.

TIP: Whole-of-life insurance is also known as life assurance by many insurers.

If you’re not sure, speak to us, and we can help guide you to what’s the best option for you.

Shop around for the best rate and policy

At Cavendish Online, we can help you find the best life insurance policy for you, as we won’t limit your search to just one company.

Call for a quote

For more information and to get a quote please call us

03456 44 25 40

Apply with advice

Finding Life Insurance Policies

Prev article

Patients Turn to Self-Funding Amid Long NHS Hospital Waits

Next article