We all know how important life insurance is. But, we also know how challenging sorting life insurance out can be! Life insurance often slips our minds, or confuses us to no end. It’s also difficult dwelling on the upsetting situations where life insurance is made a priority. Really, there’s no wonder that many of us leave life insurance on the backburner.
To make the process a little easier and finding the right life insurance a little less intimidating, we’ve compiled a guide of Do’s and Don’ts to help you prepare for the future.
Compare quotes from a range of insurers
You may be surprised to learn that due to different underwriting processes the cost of life insurance can vary significantly between providers.
As a result, it is always a good idea to compare quotes from a range of insurers to ensure you are securing the best available deal. Afterall, you pay a premium every month for the duration of the term (up to 40 years), so even a small saving could add up to a considerable sum in time.
You could source multiple quotes yourself online and/or over the phone, although this can become time consuming. Alternatively you could use a reputable comparison website or a fee-free and FCA regulated brokerage, such as Reassured Ltd to compare the best life insurance providers.
Honesty is the best policy
When applying for life insurance, we’d advise being as honest as possible in your application. Of course, that means if you smoke or are of a certain age, you might end up paying a little more.
There’s no way to avoid this outcome. But, by being honest, you guarantee that – when you’re gone – your family are well looked after, receiving the pay-out they were guaranteed. Saving a few pounds on your insurance premium isn’t worth a lie.
Amend your life insurance policy when circumstances change
Often, we get caught up in a whirlwind of family events; marriages, births, deaths, debt and employment. We forget that each and every one of these events has an impact on our life insurance policy!
When circumstances change, make sure to amend your policy at the earliest opportunity. Claims have been denied in emergencies, just because information wasn’t disclosed to your insurer.
Make a good estimation of the cover you need
While finances are always fluctuating – and predicting the future is something most of us cannot do – try and make a good estimation of the cover you need.
Make sure your main debts, whether that’s a mortgage or a credit card, are covered in the worst-case scenario. And, whenever your expenses increase, it is a good idea to ensure your life insurance increases with them. Don’t settle for the first option you see, either. There are so many options, such as group life insurance and critical illness cover. Ensure your advisor talks thoroughly about each option so that you know you’re making the right decision.
Don’t just accept the rate your mortgage lender provides
Getting a good mortgage usually requires life insurance; they’re often exclusive to each other. This is more pertinent, when your family relies on your income to pay the mortgage at the end of the month.
Unfortunately, if you haven’t already lined up your life insurance, some mortgage lenders seize the opportunity to offer inflated prices that are not reflective of the current market.
Find the lowest price for your life insurance and the perfect policy for you, separate from your mortgage lender.
Remember your future
Remember your future. When it comes to life insurance, always factor in future costs. If your children are only little now, they’ll eventually be adults! Consider university fees, home renovation and more.
But, be careful. Overestimating can result in an insurance premium higher than is necessary.
Change your insurer if you’re unhappy
Some believe, once we’ve settled on a life insurance policy, it’s too difficult or unreasonable to change.
But, if they’re increasing the cost of your premium beyond a fair or reasonable point, we recommend shopping around for other deals to determine whether your current situation is a good one.
When changing insurers, make sure you’re always covered, and be aware of any waiting periods on your new policy.
There are insurers out there that genuinely care about you. Your wellbeing should come first, and your insurance policy should be rewarding – not only after you’re gone. If not, make a change, and find the best insurer for you.