5 tips for cheaper life insurance premiums

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Summary:

  1. Consider getting an income policy instead of a lump sum

Most people know that life coverage pays a lump sum if you die. But much less does he know that he can buy coverage that pays a regular income free of taxes instead of a lump sum. Its official name is Benefit of family income and, often, it is cheaper than the most common option of lump sum payment. So, why would receiving an income be better than a lump sum?

Many people who buy a life insurance policy simply want to provide an income for …

  1. Consider getting an income policy instead of a lump sum

Most people know that life coverage pays a lump sum if you die. But much less does he know that he can buy coverage that pays a regular income free of taxes instead of a lump sum. Its official name is Benefit of family income and, often, it is cheaper than the most common option of fixed term lump sum payment. So, why would receiving an income be better than a lump sum?

Many people who take out a life insurance policy simply want to provide an income for their family to replace the lost earnings if they died prematurely. But many policies are purchased with a lump sum benefit that requires the surviving family to find adequate savings or an investment vehicle to generate a continuous income. In addition, interest generated from a lump sum is subject to taxes, while income from a family income benefit policy is paid tax-free.

For many people who are not used to managing large amounts of money, suddenly having to find the right savings or investment account can put an additional burden on an already distressing moment. This is where Family Income Benefit can provide, or offer the best of both worlds.

  1. Consider a reduction policy for mortgage life coverage

Protecting a mortgage loan is one of the most common reasons for needing life insurance. The type of mortgage you have will largely determine what type of life insurance you need, but it is often one of two types of temporary life insurance.

If you have an interest-only mortgage, you will need a level of coverage, since the mortgage debt will remain constant unless you increase or decrease the mortgage loan. However, those with a mortgage of capital and interests can opt for a policy of decreasing term in which the coverage is reduced in accordance with the reduction of the mortgage loan. As coverage decreases over time, so does the risk to the insurance company that makes this type of life insurance cheaper than the level termination option.

So, if you have a mortgage and interest mortgage with a term and level life insurance policy and only need to cover the amount of the mortgage, you could save money by switching to a reduction policy. The disadvantage of this is that you will lose any surplus coverage provided by a level policy as the mortgage loan is reduced, but the level of insurance benefit remains the same.

  1. stop smoking

All insurance is based on risk and, therefore, to reduce the cost, you must reduce the risk. With life insurance, the risk is based on your chances of dying while the policy is in force. Insurers measure risk by evaluating their medical and health history.

Anything that increases your risk of dying prematurely will increase your premiums. These risk factors may include your current health status, family history, dangerous occupations or hobbies, but the most common is that a smoker has the greatest impact.

Now, I know that you will not stop smoking to save money on your life insurance, but it is one more reason in a long list to quit smoking. Not only will you save money on cigarettes, but you can also add savings of around 40% on your life coverage premiums.

  1. Shop around

Life insurance is a very competitive market and prices can vary widely depending on where you look at it. The easiest way to compare a large number of insurers and policies at the same time is to use one of the many free online comparison websites. The only caveat in this regard is to keep in mind that these sites only compare premiums and do not cover, so you should have a firm idea of ​​what kind of coverage you need first. This will help you to compare I like and discover the real offers.

Alternatively, you can use an insurance broker to make purchases for you and this route can generate some substantial savings if you use a particular type of insurance broker.

  1. Use a discount life insurance broker

If you know what type of coverage you need and do not need any advice, a discount online insurance broker can save you hundreds of pounds in lower premiums.

Due to low costs and large audiences available through the Internet, many life insurance brokers have launched websites that offer life insurance quotes with leading insurers at discounted premium prices. These brokers can discount the coverage of major insurers by reimbursing much of the commission they receive from these insurers to reduce their premiums.

The savings vary but can mean genuine reductions of between 10% and up to 40% over the standard premiums of the insurance company. Many sites provide instant online quotes that compare multiple policies of leading insurance companies.

A simple Google search for discounted life insurance will provide a list of most brokers or use an insurance directory such as the UK Insurance Index, which also includes customer reviews.

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