Term Life Insurance
If you buy term life insurance, it is critical to note when your term ends. Before it expires you should be looking into renewing your insurance, as you don’t want to be caught out unexpectedly!
Read through the small print before you take out a policy so you know exactly what is and isn’t covered. If you’re unsure, ask the provider, your insurance broker or financial adviser. What is included varies massively by insurer, so it’s important to read the definitions so you know you’re comparing similar policies.
If you’re young and healthy, you may find it easy to get a better deal. As you get older, it can be tempting to switch but it’s important to make sure you’re getting a better deal. If you do switch, don’t cancel your existing insurance until your replacement policy is fully set up and you’ve made your first monthly payment. Once you’ve cancelled, you can’t go back.
Life changes, and your life insurance should change with it. It’s important to review your policy and make sure you’re paying a competitive price for the right amount of cover. Common reasons to change your insurance are having more children, if your partner stops working or if you’ve taken out a new mortgage. You can also decrease your cover, for example, if a new employer offers you a better death package.
Death in service
You may have employee benefits from your company that include ‘death in service’ benefits. If you have a generous package, life insurance may not be necessary. However, as soon as you stop working for that employer or change jobs, you will no longer be covered.
It depends on age, marital status, hobbies (like extreme sports), whether you are a smoker, your health (including weight and family medical history) and your job (as some carry higher risk).
How much ‘cover’ you need i.e. how much an insurer may have to pay out depends on if you have debts, mortgage/rent, how many dependents you have and your take-home pay/income.
You can get quotes from banks, specialist brokers, credit card companies, independent financial advisers, retailers like some major supermarkets, insurers, comparison sites or your mortgage provider.
It can depend on your age, job, smoker status, the percentage of your income you’d like to cover, waiting period before the policy pays out, the range of illnesses and injuries covered, and your personal health (including weight and family medical history).
You might not need income insurance if you could get by on sick pay, you could survive on government benefits, you have enough savings to support yourself, you could take early retirement, or your partner or family would support you.
You’re probably fine without life insurance if you’re single, your partner earns enough for your family to live on or if you’re on low income and eligible for state benefits. It’s always best to get impartial financial advice if you’re not sure.
Life insurance can be very good value, and only cost a few pence a day to provide all the protection you and your family might need. Premiums do vary and are highly dependent on many factors. In general, the younger and healthier you are, the cheaper your life insurance policy will be.
You have up to 30 days to change your mind about your insurance policy and get a full refund.