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5 handy tips to save money on your life insurance

5 handy tips to save money on your life insurance

Feb 23, 2023

In recent months, you will have noticed that your expenses will have risen significantly. Whether it’s your energy bills, weekly shop, or filling up your car you’ll likely have seen your budget stretched for even basic items.

Indeed, the Guardian reports that the annual rate of food inflation stands at 16.7%, while the cost of eating at restaurants has risen by 11% in the last year.

Over the 12 months to January 2023, here’s how the average price of some basic goods and services have risen:

  • Electricity – 66.7%
  • Low-fat milk – 45.2%
  • Sugar – 40.9%
  • Eggs – 28.8%
  • Pet products – 17.3%
  • Hotels and motels – 18.2%
  • Soft drinks – 16.2%
  • Fridges and freezers – 15.6%

In tough times, making sure you compare the prices to make savings can make your money go further. That’s the case whether you’re buying “own brand” supermarket goods or if you’re looking to put the right protection in place.

To help you manage the cost of living crisis and to save you money when you want to buy life insurance online, here are five tips that can reduce your premium.

1. Shop around

Shopping around is one of the best ways you can reduce the cost of your life insurance. Before you sign up for the first policy you see, take a few minutes to check the cost of cover with a range of providers.

You may have received a quote for protection from your bank, your financial adviser, or the person arranging your mortgage for you.

Shopping around can help you find the right cover at the right price.

For example, when you compare life insurance online with us, we’ll scour the market and compare the costs from dozens of the UK’s leading life insurers – household names like Aviva, Legal & General, Scottish Widows, and Royal London.

We can then show you the cost of cover with each of these providers, helping you to save money.

Always remember that your life insurance policy could last for 10, 20, 30 or even 40 years, and so a saving of even a few pence a month could add up to a significant amount over the entire term.

For example, if you save yourself 85p a month on a 30-year term insurance policy, that’s a saving of more than £300 over the lifetime of your protection.

If you think shopping around will be time-consuming and boring, we can give you a comparison quote in just a few minutes. Get a life insurance quote now and you could see the savings you make straight away.

2. Don’t take out more cover than you need

The cost of your life insurance is based on various factors:

  • Your age
  • Your health and lifestyle
  • The term of the policy
  • The type of policy
  • The amount of cover you need.

You’ll read more about how choosing the right type of policy can generate savings in section 4 below.

The amount of protection you need will also affect the price that you pay. The higher the level of cover (the “sum assured”), the more your premiums will generally be.

So, when you take out cover, make sure you don’t take out more life insurance than you need. If you do, you could end up paying more than you should for cover.

When it comes to thinking about how much life insurance you need, consider factors such as:

  • Do you have a mortgage or other debts you’d like repaid if you were to pass away?
  • Would you like to leave a lump sum to your spouse or partner?
  • Do you have children? Would you like them to benefit from the same standard of living as they are used to if you passed away?
  • Would you need protection to replace your income if you were no longer around?
  • Could your loved ones pay for your funeral?

Remember that you may need to protect one or more risks. For example, if you have an outstanding mortgage and young children, you might want to ensure the mortgage is repaid if you die, and also provide a lump sum to help your spouse/partner to pay for costs relating to your children.

If you’re not sure where to start, use our life insurance calculator to help you to work out how much life insurance you might need.

3. Consider a joint-life policy – although remember you’ll benefit from less cover

As you have previously read, there are lots of benefits of taking out single-life cover rather than a joint-life insurance policy.

  • It increases the amount of cover you have in place
  • You can tailor your individual cover more closely to your needs
  • You can keep your cover if your circumstances were to change in the future.

While this can be a great way to arrange your life insurance, it will generally be slightly more expensive (although not always!) to take out individual policies than to take out joint cover.

So, the third way to save money is to think about arranging your cover in joint names, rather than taking out an individual policy.

While this can save you money, it’s important to remember that, once your term assurance pays out, it ends.

So, if you have a joint-life policy with your partner and they die, the policy will pay the sum assured and end. There won’t be a further payout if you were to also die within the term.

If you then decide you want to insure yourself, you will be older, and the insurance is likely to be more expensive – particularly if you have developed any medical conditions.

4. Compare different types of protection

As you read above, the cost of life insurance is affected by the type of policy that you take out.

Whole-of-life insurance is normally more expensive than term insurance, because it’s guaranteed to pay out on your death.

Decreasing term insurance is ordinarily cheaper than level term assurance, as the amount of cover reduces over the term of the policy.

All this means that finding the right type of policy for your needs is really important.

For example, if you want to take out life insurance designed to repay your repayment (capital and interest) mortgage if you die during the term, a decreasing term assurance policy might be appropriate. This is likely to be cheaper than the equivalent level term assurance policy.

If you want your life insurance to provide financial support for young children, family income benefit can be a very cost-effective way of arranging your cover. Read about some of the benefits of this type of protection.

If you’re not sure what type of cover is right for you, speak to one of our experts who can talk you through your options.

5. Speak to an expert with access to really competitive premiums

As you read in section 1, shopping around for your cover can help you to save money on your life insurance premiums.

We can go one step further. As we take a lower than standard commission from the insurers we work with, this reduces your premiums even further.

Not only will you benefit from great value, but our five-star service means you’ll also find arranging your cover easy and straightforward.

Get an online life insurance quote now, or speak to one of our experts if you want to learn more.

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