There's nothing more important than providing financial protection for our loved ones if we die . Life insurance is a great way to ensure your family is financially secure if the worst were to happen to you.
However, there is no one size fits all policy. Sometimes buying life insurance can be expensive, but there are a few ways to get cheap life insurance premiums...
The cost of your premiums will depend on the type of cover you decide to buy. There are two main types of life insurance - term and whole:
Whole of life insurance - This type of cover protects you for the rest of your life (as long as you continue to carry out your monthly payments). Your family receives a guaranteed cash lump sum when you die, helping them to cover any future costs. Premiums for whole life cover tend to be more costly than other types of cover.
Term life insurance - Unlike whole life cover, term life insurance covers the policyholder for the period of time they select (i.e. 20 years). The policy pays out if you die within this timeframe, if not, it simply expires. Premiums for term life cover are typically cheaper than whole life insurance, however a payout isn't guaranteed.
You can also get joint life insurance cover. This protects two people under a single policy, and generally works out cheaper than buying separate policies. Learn more about how joint life insurance works.
If you're unsure on how much cover you need, take a look at how much you earn each month. This is a good indication of how much your family will need in your absence.
You should also consider any loans or debts you have outstanding, such as repayments on a mortgage. Your family will be required to fulfill these repayments in the event of your death.
When you apply for cover, your insurer will ask you to fill out a questionnaire. This will help them gain an accurate understanding of your health and the type of policy you're looking to buy. It's important to answer truthfully, otherwise your family could be denied a claim later down the line.
How can I get cheap life insurance?
There are a number of ways you can get affordable life insurance cover, however this isn't a guarantee for everyone. Nevertheless, here are some of the ways you can save money on cover:
Buying cover when you are young - Premiums for life insurance tend to rise as you get older. This is because there is an increased chance of developing a medical condition or illness. With this in mind, it's best to take out a policy early to get a cheaper premium rate.
Live a healthy lifestyle - Not only will this help to increase your lifespan, but it can also help reduce the cost of your life insurance premium. Regular alcohol consumption and smoking can indicate to your insurer that you aren't healthy, which can lead to increased premiums. If you are a smoker, you can expect to pay higher premiums altogether, therefore it's best to quit before you apply.
Apply for term life insurance - As previously mentioned, premiums for term life cover tend to be cheaper than whole life. Therefore, if you're looking for a cheap policy, it may be better to choose a term life policy. However, this means you'll only be covered during the policy term.