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10 ways you can cut the cost of your life insurance

10 ways you can cut the cost of your life insurance

Feb 10, 2021

One of the main objections we hear from people with no life insurance is “it’s too expensive”.

The first thing to say here is that life insurance is probably cheaper than you expect. A recent Legal & General study revealed that nine out of ten people significantly overestimate the cost of life insurance.

When asked how much £100,000 worth of life cover, over 30 years, for a 30-year-old non-smoker cost, the median response was £23 per month. In fact, the cost was less than £8 per month.

While the cost of cover may be a lot less than you think, there are also lots of ways that you can reduce the price of your life insurance premiums. Here are ten tips.


1.Shop around

There are dozens of life insurance providers in the UK, each offering different prices for cover. So, as with many financial products, it pays to shop around.

Whether you’re looking for simple life insurance, you have a pre-existing medical condition, or you’re looking for specialist advice, it can pay to talk to an expert. That’s where I’m Insured come in.

We work with more than 200 of the UK’s leading life insurance providers to find the right cover for you, at the right price. Get a life insurance quote in minutes and find out how much you could save.


2.Stop smoking

Smoking increases the cost of life insurance. That’s because smoking has a negative impact on your health, making you a bigger risk to insurers. Note that e-cigarettes are also classed as smoking products when it comes to taking out life cover.

If you stop smoking you will reduce your life insurance premiums. If you gave up more than a year ago, it could pay to compare life insurance quotes online and get a quote as a non-smoker. You may find the cost of cover is significantly lower. It may even be cheaper than the premium you are currently paying.

While you can’t normally adjust your existing life insurance to reflect your non-smoker status, you may be able to take out a new policy as a non-smoker. This could reduce the cost.

Remember that you should always wait until your new life insurance is in force before cancelling any existing cover.


3.Choose the right level of cover

When putting life insurance in place, it’s vital that you make sure you choose the right level of cover.

If you take out too little, you could leave your loved ones facing financial problems if you were to pass away. They might not have sufficient resources to repay the mortgage or pay monthly bills or other commitments.

However, taking out too much cover can also be a mistake. If you do, you might find that you’re simply paying too much for cover you don’t really need.

When taking out cover, think carefully about exactly how much you need. Think about how much it would cost to:

  • Repay any mortgage you have
  • Replace your income
  • Pay the mortgage or rent, and monthly bills
  • Provide for any children you have
  • Pay for any specific items such as children’s education.

You also need to think about how long you might need cover for. This could be until your mortgage is repaid, or your children are financially independent.

If you need help, our online life insurance calculator can help you to work out what level of protection you need.


4.Choose the right type of policy

There are various different types of life insurance, and the one you choose will affect how much you pay.

For example, a whole-of-life insurance policy is likely to be the most expensive, as it is guaranteed to pay out on your death.

Term insurance is generally a cheaper option as it covers you for a fixed period. If you don’t die within that period, the policy ends, and you don’t receive a payout.

Term assurance can be a very cost-effective way of getting the cover you need. It’s useful for protecting a mortgage, or ensuring a lump sum is available to your family if something happens to you before your children are adults.

Again, it can pay to speak to an expert if you’re not sure which type of cover is right for you.


5.Don’t automatically buy it when you take out your mortgage

When you take out a new mortgage – especially with a high street bank or building society – it’s likely that the adviser will encourage you to take out your life insurance with them.

While it may seem helpful to have all the cover in one place, it’s unlikely that your bank will offer the best terms for the cover you want.

As you saw above, it really can pay to shop around when it comes to life insurance. Head online and compare life insurance quotes before simply accepting a deal from your adviser.


6.Regularly review your cover

It can pay to review your cover every year or two to make sure your premiums remain competitive. Head online, get a quick life insurance quote, and compare the cost of cover with what you’re paying already.

If your circumstances have changed – perhaps you no longer smoke, your health is better, or you’re in a less risky job – then you may find the cost of life insurance is lower.

As above, just make sure you put any new cover in place first before cancelling an existing life insurance policy.

7.Take out your policy when you’re younger

Life insurance is cheaper for younger people. In simple terms, if you’re younger you’re statistically less likely to die in the next 25 years then someone much older.

So, taking out life insurance when you’re younger can be a great way of keeping premiums down.

For example, a Legal & General study found that £100,000 of life cover, over 30 years for a non-smoker, costs just £6 per month if you’re aged 24.

If you’re 38-year-old, the same cover costs £10.65 per month.

8.Consider a joint-life policy

If you want to cut the cost of your cover, taking a joint-life policy can be cheaper than ensuring two individuals separately.

This ensures both you and your spouse or partner are protected. The policy will pay out if either of you die within the term.

However, a joint-life policy will only pay out once. After that, the surviving person has no more cover, which could be a consideration if you have children.

Joint-life cover can also sometimes be an issue if you later separate from the other policyholder. Many insurers won’t let you “split” a life insurance policy, so you may have to cancel the cover and take out new protection, which could be more expensive.


9.Become more healthy

If you live a healthy lifestyle, you’re less of a risk to an insurer. So, your life insurance should be cheaper.

You’ve already read about how stopping smoking can reduce your premium. If you drink less and get plenty of exercise, then you might also see the cost of your cover come down.


10.Pay less commission for cover

When insurers work out the price of life insurance, many factor in the cost of the commission they pay to websites and brokers who have introduced clients to them.

It follows that, if the insurer isn’t paying as much commission, they can pass this saving onto you in the form of cheaper cover.

At I’m Insured, we intentionally take a lower than standard commission from an insurer. This approach means cheaper life insurance for you.


Get in touch

We’re life insurance experts and can help you find the right cover at the right price. Head to our website to compare life insurance quotes in minutes. And, if you want to speak to an expert, please get in touch to find out what we can do for you.



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