With around 27 million individual life insurance and critical illness policies held in the UK (according to the latest industry statistics), it appears that many of us understand the benefit of having this cover.
What you may not know, however, is that there may be ways to
- pay less for your cover;
- increase your sum insured without needing to answer a medical questionnaire;
- and fix how much your monthly premiums cost.
Read on for our top seven tips to pay less for life insurance …
1. Cutting out cigarettes. Non-smokers always get charged a lower premium than smokers, because, as statistics prove, smokers are more likely to claim on their life insurance as they are more at risk. Most insurers need you to be nicotine-free for at least a year to count as a non-smoker, but if you have given up smoking for over a year, tell your insurer - you could pay less for your cover going forward.
2. Have you lost weight? On the same theme of lifestyle changes, if you were overweight when you originally took out your cover but have since lost a substantial amount of weight then you may be paying too much for your cover. Your insurer won’t be able to reduce your premiums, but it’s worth getting a quote for a new policy. You may find your new premiums with a lower BMI are cheaper.
3. Does your current policy have extras? Do you have premium waiver (which means that your premiums are waived if you become unable to work due to illness) or critical illness cover? It might be worth reviewing your existing life insurance policy to make sure you are only paying for what you actually need.
4. Check to see if you have guaranteed or reviewable premiums. With guaranteed premiums, once you have a monthly price then you will pay that for the duration of the policy, meaning you can budget accurately. With reviewable premiums then the price can fluctuate. PayingTooMuch.com have now excluded all reviewable premiums! So a policy from us won’t get more expensive as you get older.
5. Does your policy have a guaranteed insurability option (GIO)? This allows you to increase your sum insured sometime in the future in case your circumstances change – you move to a bigger home, for example, or need more cover as your family grows. If you choose to take advantage of this increase, you won’t need to complete a medical questionnaire.
6. Have your hobbies changed since you took out your policy? If so and you used to enjoy adrenaline-fuelled activities such as white water rafting or mountain climbing then your life insurance premiums typically would be more expensive – due to the higher risk of you dying. If you no longer partake in these dangerous hobbies or sports then tell your insurer – your premiums may get cheaper.
7. Did you lie on your original life application form? Maybe you did not disclose all of your medical history, or perhaps lied about your weight? Then now is the time to come clean with your insurer. Despite what people think, if a claim is made on your life insurance policy, any “missed information” will be found out. This could mean that those you leave behind do not get the proceeds of the policy. Always be upfront and honest with your insurer.
Review, compare and contact us
Regularly reviewing your life insurance may make sense. Take a look at the tips above and make sure that you are not paying more than you need to. This is especially important if you have made positive lifestyle changes, such as giving up smoking or dangerous sports.
Finally, the price of life insurance is cheaper than it was several years ago, so even if you are happy with your current policy, it may make sense to shop around to see if you can get a more cost-attractive deal.
Conversely, of course, the older you are when you apply for life cover, the more it may typically cost (this is because a 50 year old is statistically more likely to die than a 25 year old). But unless you compare your life options, you’ll never know if you could be getting cheaper cover elsewhere.
Many of the tips above will require you to reapply for your life insurance. This isn’t something to be scared of, and could save you a small fortune over the years. If you have any questions, or need help and support, call Rob and his life insurance team on 01243 219138.