Life insurance made easy

by Jane Baker on 15 October 2009  |  3 comments
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Giving life insurance a miss is one of the biggest financial mistakes you can make. But if you've been put off by all the jargon in the past, have no fear - help is now at hand.

Most of you won't have the life insurance you really need. Why's that? My guess is that it's all just a bit too complicated. And complicated tasks are very easy to put off.

But help is at hand...

It's not your fault!

I'll readily admit the financial services industry has done little to make protection products easy to understand. Even the policy names themselves can cause great confusion particularly when two plans sound very similar but actually do completely different things. If you want to know more about that, take a look at Protecting your income if things go wrong.

The fact is, life insurance itself isn't complex: it's simply a policy which pays cash on death. But you'll need to make sure you choose the right type of protection and enough cover too. These decisions can be difficult. Get them wrong and you could do untold damage to your family's finances further down the line.

What do I need to do?

In a nutshell, you need to find the right policy and the right amount of cover at the right price.

The right policy

There are five key policies to choose from, when it comes to protecting your life:

• Level term assurance
• Level term assurance with critical illness cover
• Decreasing (mortgage) term assurance
• Decreasing (mortgage) term assurance with critical illness cover
• And, if you want to switch your existing policy, critical illness cover as a standalone plan.

Confused? To make things a bit easier (and clearer), we've launched a new life insurance service here at lovemoney.com which is a bit different. Before you start the quotation process, you'll be asked how you want to be protected to help you find the right policy. For example, if you say you have a repayment mortgage which you would like to be paid off on death, you'll be pointed in the direction of a "decreasing term assurance policy".

In other words, to get the right policy, you don't need to wade through lots of jargon, you simply need to know your own needs and requirements.

The right amount of cover

How much cover should you buy? Answering this question correctly is just as important as getting the right protection plan. Under-insure your life and you could leave your family with a significant financial shortfall if they ever have to claim on your policy.

To make sure that doesn't happen, check out this cover calculator. If you want to provide protection for your family, for example, the calculator will help you work out how much they might need to live on each year. This will allow you to arrive at the total amount of cover you require to effectively replace your salary and safeguard their lifestyle in your absence.

The right price

Obviously, you'll want to find the most competitively-priced policy - and that means shopping around.

Again, we hope our new life insurance service can help. It provides quotes from a wide range of the UK's biggest insurance brands, and - just as you would expect from lovemoney.com - an average of 30% of the commission earned will be re-invested to provide you with discounted premiums. In fact, if you're able to find a cheaper policy anywhere else, your best quote will be matched to the penny.

You'll also have the opportunity to compare any current policies you have with other plans that are available on the market now. This should help you decide whether to switch if a better value policy can be found saving you money off your premiums.

Best of all, you can get a quote in less time than it takes to make a cup of tea. And as long as you don't suffer from any pre-existing medical conditions, and you don't have a hazardous occupation or pastime, you should be instantly accepted for cover.

Sounds pretty easy, doesn't it?

An extra helping hand

Finally, if you use the service and then find you need more help to choose the right policy, you can email the life insurance team for advice. 

So, what are you waiting for? Check out the new lovemoney.com life insurance service today!

More: When you don't need life insurance | My tops five tips for buying life insurance