3 steps to cheaper life insurance - Video script

by John Fitzsimons on 01 June 2010  |  4 comments
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John Fitzsimons looks at three simple ways to cut the amount you spend on your life insurance.

Life insurance is an absolutely crucial outlay if you have any financial dependents. Should something happen to me, I want to be sure that my wife isn’t left out of pocket as a result. But that doesn’t mean that I want to be spending more on my life insurance than I need to be.

Thankfully, there are things you can do to keep your life insurance spend to a minimum.

#1 Pay for what you need!

When taking out life insurance, you have a couple of big decisions to make straight away. Do you want level term assurance, which will pay out the same lump sum whether you die in year one or right at the end of your policy, or the cheaper option of decreasing  term assurance. As the name suggests, decreasing term assurance means that the amount of cover you have decreases throughout the term of the policy – a good idea if you just want to cover a repayment mortgage.

You’ll also need to decide how much cover you want, and for how long. We have an online life insurance calculator to help you make these decisions. The choices you make will affect how much your policy costs you, so only pay for what you need!

#2 Shop around and switch

Even if you already have life insurance, you should still shop around so you can switch if you find a more competitive policy!

Just go to lovemoney.com/lifeinsurance and by entering just a few details you’ll soon have access to a range of quotes which might just be better than your existing deal.

#3 Get healthy!

And finally, a very simple way to cut how much you spend on your life insurance is to be as healthy as possible. My broker explained to me that the reason my own insurance costs more than he expected was because of my height/weight ratio – in other words, I’m carrying too much timber.

Similarly, if you smoke your premiums will be a fair bit higher. So if you can quit the fags, you’ll save a fair few quid!