5 Top tips to save on your family life insurance

Posted: Tuesday September 24 2019

By: Guest Bloggers

The daily living costs alone are enough to require tight management of your budget, without additional costs such as clothing, toys, trips and education. As a result, it can be hard to justify investing money into something which doesn’t exhibit immediate benefit, such as life insurance. There are various forms of life insurance available to parents, but essentially, they all provide a financial safety net for your loved ones if the worst were to happen to you.

Being a parent in 2019 is expensive!

The daily living costs alone are enough to require tight management of your budget, without additional costs such as clothing, toys, trips and education.

As a result, it can be hard to justify investing money into something which doesn’t exhibit immediate benefit, such as life insurance.

There are various forms of life insurance available to parents, but essentially, they all provide a financial safety net for your loved ones if the worst were to happen to you.

Without such security in place, your loved ones will not only be faced with costs such as legal and funeral fees, but also have to cover daily living costs, mortgage repayments and debt in your name without your financial input.

The good news is that even on a tight budget, life insurance can be affordable and there are a number of small steps which can be taken to ensure you don’t pay more than required.

We asked award-winning life insurance broker Reassured to share their top 5 money saving tips.

 

Joint Cover

If in a partnership, you could save yourself some money on life insurance by arranging a joint policy, rather than 2 singles.

On average this will save you about 25% and only requires you to pay one premium as opposed to two.

There is also only one application required, saving precious parenting time.

There is a downfall with this method though, which suggests if your budget permits you may benefit more from two single policies.

Whilst a joint life insurance policy covers two people simultaneously, it does only cover one death. Meaning that a lump sum pay out will be made upon first passing.

As a result, the surviving partner receives a lump sum pay out but is left without protection and needing to arrange new cover at an older age and potentially poorer health.

Type of cover

As mentioned, there are a number of different life insurance policy types available to parents. However, each of these are best suited to protecting different aspects within your life.

As a result, when arranging cover, you should consider which type is most relevant.

Some life insurance types are more expensive than others, meaning that you could pay more than necessary if you are paying for a type of policy you do not necessarily require.

For example, level term life insurance pays a fixed lump sum regardless of when you pass during the term of your cover, making it ideal for covering an interest only mortgage.

However, it is more expensive than decreasing term life insurance which provides a lump sum pay out which reduces in value throughout the term of the policy.

This pay out type is ideal for cover a repayment mortgage.

Therefore, when arranging mortgage life insurance, you should consider which type is best suited to your needs, as arranging level term cover for a repayment mortgage will result in you paying more on a monthly basis than you really need to.

If you only wish to cover family living costs then family income benefit insurance may be a good cost effective option.

Amount of cover

When arranging life insurance, it can be tempting to select the maximum amount available to you. Afterall, who doesn’t want to provide their family with the highest level of protection.

However, the more cover you arrange, the more you will pay on a monthly basis.

Therefore, to avoid paying more than required it is important to examine what aspects of your life require protection and secure the amount required to offer this level of protection only.

For example, the outstanding balance of your mortgage, plus outstanding debt in your name, plus funeral costs.

Lifestyle

The cost of life insurance premiums is calculated using a number of factors; lifestyle being one of the most important.

It takes into account your smoking status, alcohol consumption, occupation, hobbies and health.

If any high-risk factors are identified, the cost of monthly premiums is increased to mitigate the added risk this poses to the insurer.

Therefore, a few simple changes to your lifestyle could save you precious pennies. For example, cutting down on alcohol, quitting smoking, or looking at changing occupation to a less risky role.

Changes to your lifestyle may not be immediately reflected in your monthly payments, for example, if you have smoked or used nicotine replacement products in the past 12 months you will still be classed as a smoker, but in the long run you will reap the rewards.

Comparing quotes

It is possible to arrange life insurance cover in the UK from as little as 20p a day, however, the cost of monthly premiums and type of cover you will receive, will vary significantly between insurers.

Therefore, to ensure you receive the best possible deal, it is essential to compare quotes from multiple insurers.

How you carry out this process is entirely up to you, but typically there are 3 different methods.

You could carry out the process independently, although this could become very time consuming – And we all know how difficult it can be to find spare time as a working parent.

Alternatively, you could use a comparison website. These are quick and compare a wide range of insurers immediately, however, they do require some understanding of the industry jargon to ensure your application is correct.

Finally, you could opt to use a life insurance broker. They will compare quotes on your behalf and provide you with all the information you need to make an informed decision. And their services are usually completely free!

Protect your family

So, as you can see, even on the tightest of household budgets, there are ways to make life insurance more affordable.

And as always, your loved ones will benefit from some cover in place, rather than none at all.

So start your journey to affordable protection for your family today.

 

Family income benefit Reassured: https://www.reassured.co.uk/life-insurance/family-income-benefit/