Overcoming the false perceptions of high cost life insurance

Since Covid-19 has entered the consciousness of people’s minds across the UK, so has the subject of life insurance.

Sadly, if we’ve learned anything from the pandemic, it’s that the future isn’t promised to anyone. A harrowing thought, but sadly, a very real one.

Of all insurance products, Life Insurance is perhaps the one that’s most often misunderstood. It’s misunderstood regarding who needs it, who benefits from it, and typically by how much it costs. We often find that the majority of people are surprised to know how little their monthly premium works out to be, and for the majority of people, it’s far less than they’re paying for other insurances every month. It’s also an insurance that almost nobody could possibly regret buying, for the peace of mind and reassurance it can bring.

If your children, partner or other family members depend on your income to cover their living expenses (and the home that they live in) you should definitely consider life insurance to help provide for them in the event of your death. You can’t rely on the state to take care of your family – the money they would get from the government is likely to be much lower than you’d expect.

Why do so many people put off purchasing a policy?

There are numerous reasons as to why people in the UK don’t have policy in place, but typically, it’s down to 3 main factors:

1. Believing the cost of a policy is out of their reach.
    
2. Wrongly assuming they’d be ineligible for cover.
    
3. Not understanding what type of life insurance to buy and how much cover they need.

Fortunately, like many things in life that at first seem daunting or difficult, when you actually decide to give it a go, you may surprise yourself by how easy and straightforward the process is.

Thanks to more streamlined quote engines, it’s never been easier (and quicker) to arrange and compare life insurance policies online, no matter what stage of life you’re at. Over the years, life insurance brokers and providers have streamlined the application process so you can have cover in place in as little as 30 minutes.

Before You Buy

To apply for the type (and level) of life insurance you need, it’s important to take on board your individual circumstances, like savings, mortgages and existing credit arrangements that you have in place. As everyone’s situation is different, so is the type of protection you’ll need - depending on your personal situation and what stage you are in life. 

Your age and health in general (including if you smoke) are just a few factors that will be considered when applying for cover - determining how much your monthly premium will be.

Know what you’re buying

If you’ve already been looking at different options, you may have noticed that you could get a separate ‘single’ life insurance policy as an individual, or as a joint policy with your partner or spouse. Some people like this option as it’s easier to manage, usually cheaper than both having separate policies and it’s also often quicker to set up. 

‘Single’ and ‘Joint’ Life Insurance policies are similar, but with a few key differences:

‘Single’ Life Insurance covers just one person and if the policyholder were to die during the term of the policy, their loved ones would receive a payout. If you and your partner were to decide to take out two separate ‘single’ policies, then a payout could then be claimed for each policy if both policyholders die within the term.

It’s also important to know the difference between the two types of life insurance policies you’re most likely to come across, being ‘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.

‘Whole-of-life’ insurance policies are just that (the clue being 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 find the best option for you.

Prefer to phone?

Sometimes, it’s easier just to give us a call and speak one-to-one with one of our insurance specialists, who can guide you through the process and support you in choosing the best low cost cover for you and your family.