Choosing The Best Life Insurance Policy For You

Life insurance is a type of financial cover which will provide those who are dependent on you with compensatory payments in the unfortunate event that you pass away. It is advised that any family which has a sole breadwinner or are reliant on the income of a single member consider obtaining life insurance cover.

However, there is a variety of different life insurance products on the market which are all suited to people in different circumstances, and it can be difficult to choose the right insurance policy for your individual circumstances. Fortunately we can make the decision of which policy to choose simple and easy – all you have to do is fill out our Quote Form in order to be instantly matched with the best quotes from the leading life insurance providers available.

Within the comparison process you will be linked with an advisor who will consider all of the relevant factors such as the amount of cover you wish to take out, your ideal insurance term length and the amount you can afford to pay into your premiums each month, in order to ensure that you obtain enough cover to keep your family financially afloat if you were to pass away.

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How The Comparison Process Works

1. Fill out our form

This will give us all of the information needed about your insurance policy requirements and aid in the comparison process.

2. Speak to your advisor

You’ll instantly be put in touch with an advisor who will explain the details and benefits of the best insurance policies for your individual situation.

3. Speak to your chosen insurance provider

Once you and your advisor have found the policy is right for you, the application process is easy and straight forward.

Age Thresholds

Always evaluate the age thresholds specified within your insurance contract. It is imperative you do this because a number of providers will supply you with cover until you get to a certain age, and will then cancel your cover after you age further. In order to avoid this, you should make sure your family is covered for a suitable timeframe.

Your Medical History

Provide all the life insurance companies you apply to with accurate information about your medical history. This is important because your entire cover could be cancelled in the future if it is found that you either intentionally withheld or failed to provide legitimate information about your health and finances.

Cash-In Value

Does the policy you are taking out have cash-in value, and do you need it at all? Not all individuals actually require taking on higher premiums in order to secure the acquisition of this feature onto their insurance and you might decide that it is unnecessary for your situation.

30 Day Grace Period

Remember, every life insurance firm is bound to official regulations from the Financial Conduct Authority (FCA) which allows all policyholders to terminate their arrangement within 30 days of their initial acquisition.

Already Have Cover?

Are you receiving some form of life insurance through your employment or mortgage contract? If you believe you are, then it is probably not worth spending even more each month on cover that you already have.

Right Type of Insurance

Make sure you obtain the best type of life insurance for your situation. There are four primary kinds of life insurance, which will be elaborated on below, and each is best suited to individuals of ranging circumstances.

Level of Cover

How much cover do you actually need? You will need to take into account a number of factors such as your age, number of dependents and the amount you pay each month subsiding your families living costs in order to determine an accurate figure. You should also evaluate your income and weigh it against the premium quotes you receive from providers, so that you can identify whether you can realistically afford to make full contributions each month towards your life insurance.

Tax Considerations

Consider the impact that tax would have on the payouts from your policy in the event that you were to pass away. A number of insurance deals will payout cash that will need to have inheritance tax paid on it and you will need to set up a trust fund in advance in order to ensure that you prevent this from happening. Make sure you discuss this issue with your provider and ask them about all tax-related matters, because determining how tax will affect your policy later on down the line is integral to acquiring the best policy for your money.

Making Late Payments

Are you competent at managing your money and do you have a steady and regular income? If the answer is no, then you will need to find a provider which has a lenient stance towards customers who make late insurance payments. Certain suppliers do not severely penalise policyholders who make occasional payments late or miss them altogether whilst others will impose heavy fines or even terminate the arrangement, so it is worth self-evaluating your financial capacities before deciding on your final cover.
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The Best Providers

Your advisor will compare quotes from the leading life insurance providers in order to get you the lowest quote possible, while still ensuring that your life policy meets all of your requirements.

How much cover do i need?

Life insurance is a long-term financial commitment, and as such it is imperative that you use a tried and tested methodology right from the outset of looking for a premium, so that you can accurately determine how much cover you actually need to pay for each month. We recommend you use the following:

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Stage one

Calculate your total debt and monthly expenditures

  • Your total debt: Calculate the outstanding value of all secured and unsecured debts, including your mortgage, overdraft and credit card debt.
  • The areas of expenditure that you are seeking to obtain insurance for. This should include the amount you spend each month on your families living essentials, such as food, travel, and health as well as areas of future expenditure such as the costs of getting your kids through college and higher education.
  • The costs of your funeral. Your family will likely have to pay a large amount on your funeral, and we recommend you cover yourself for around £5,000 in order to financially prepare them for this.

Stage two

The areas of expenditure that you are seeking to obtain insurance for

It is important to do this in order to ensure that you do not start paying for a new policy which covers the same areas included in a workplace or mortgage cover that you are already receiving. Ask your employer whether you are currently entitled to a benefits package as part of your work contract and enquire whether there are any ‘death in service’ clauses attached. Similarly, ask your mortgage provider whether they have included cover for your repayments in the event you pass away.

Stage three

Identify how much cover you require

After you have determined how much debt you are paying back at the moment, the amount your family would need to pay for future endeavours, the amount of money your funeral would likely cost and how much you spend on your monthly living expenses, you should add these together to calculate the total amount your family needs covering for. You should then subtract the amount of cover you currently have from this total to determine a final figure for how much you need to get covered for.

Another easy way to determine how much you require is multiplying your current annual salary by twenty, though this will not give you as accurate an indication of the ideal amount you require to make sure your family is sufficiently covered.

Get A Competitive Quote

It’s important to shop around for the best possible quote in order to save money while also getting a life insurance policy that meets your personal requirements. The easiest way to do this is to fill out our quote form and to speak to an advisor who can give you a breakdown of the best quotes for your individual situation.

Types of life insurance

Level Term Insurance

Type of insurance: Level term insurance

How it covers you: You will be covered for a specified and fixed timeframe- your dependents will only be paid out by your insurance company if you pass away during this term.

Advantages: Usually has the least expensive premiums and is a straightforward and easy way to obtain life insurance.

Best suited to: The majority of individuals who have dependents and homeowners with a large amount of outstanding secured loan debt.

Decreasing term insurance

Type of insurance: Decreasing term insurance

How it covers you: Your cover will last for a fixed timeframe – Your dependents will be paid out by your insurance provider if you pass away during this specified term. However, the amount they stand to get paid out decreases every year that passes whilst you are alive and your term is still running.

Advantages: Usually one of the least expensive forms of cover and supremely benefits families who primarily require the cover to make their properties mortgage payments.

Disadvantages: Is only applicable to people who are taking the cover out for their property, as it only covers mortgages.

Best suited to: People who are paying back the mortgage on their house and are confident that their dependents could cope financially if they die, as long as their housing costs are paid for.

Whole-of-life insurance

Type of insurance: Whole-of-life insurance

How it covers you: Your insurance will cover you throughout the entirety of your lifespan – your dependents will be paid out by your insurance company irrespective of when you pass away.

Advantages: You can rest assured that your family will always receive financial support if you die, providing you make your insurance payments in-full and on-time.

Disadvantages: Are far more costly than conventional fixed-term cover.

Best suited to: Wealthy individuals who possess a number of assets that they intend to pass onto their dependents when they die.

Family income benefit insurance

Type of insurance: Family income benefit insurance

How it works: Your cover will last for a fixed time frame – during which time your dependents will be paid out by your provider as long as you pass away during this term. The amount your dependents stand to get paid decreases with every year that passes on the policies term, though your family will be paid out regularly in smaller instalments, rather than in a lump-sum of cash.

Advantages: A cost-effective way of acquiring life insurance

Best suited to: Families which are financially reliant on the income of a single member.

How it works: Like decreasing term but pays out a regular income for the remaining term.

 

For mortgage related life insurance deals, you will need to choose from one of the two following cover types

 

Level-Term

If you obtain a level-term policy, then your dependents will be paid out a set amount of cash if you pass away during its term. This can substantially benefit individuals who currently repay their mortgage on an interest-only basis as it provides a sufficient level of cover for the policyholder’s family.

Decreasing-Term

If you acquire a decreasing term policy, then the amount your dependents stand to be paid out decreases every year that passes by within that term. If you do not have an interest-only mortgage, then this type of cover can be beneficial as you will pay less on your premiums for opting for a decreased-term deal, and your family will receive lower payments as you repay your mortgage.

Benefits to look out for when considering life insurance

As well as considering the different types of premiums when seeking cover in the event you die, you should also look at the other benefits that are attached to life insurance deals, in order to obtain the most beneficial deal for you.  These follow as:

Fixed rate inflation facility

If you are acquiring life insurance in order to cover your families expenses in the event you die, then you might want to consider attaching a fixed rate inflation dimension to your policy, to ensure that the payouts they receive every year rises in line with the cost of living. Usually, deals which include this facility will be more costly, so you will need to come to the decision about whether you really need to pay more on your life insurance in order to ensure that your family receives enough financial support each year to cope with the rising cost of living.

Waiver of premium facility

You should look at the policies being offered to you by different providers and see if any attach a waiver of premium facility to their offerings, or are prepared to add it onto your premium costs if you pay a bit extra. Waiver of premium facilities are useful for people who participate in activities which put them at risk of being injured, because it essentially ensures that their life insurance payments are covered in the event that they suddenly fall ill, are injured or succumb to general health problems.

Type-change clauses

Certain insurance policies will grant you the ability to change the type of life cover you are receiving from one type to another. It can be extremely helpful having this contained within your life insurance deal as it grants you the flexibility to adjust your cover in accordance with your circumstantial changes. Thus, if you first took out your cover when you only had one child, and ended up having five in total, then you could use the clause to change your life insurance deal to cover a larger amount of money. If you are only just starting a family, or envisage having a larger number of dependents in the future, then it would be worth attaining this clause in your policy to obtain the flexibility you might require in the future.

Renewal clauses

It is worth evaluating whether the deals you are being offered have a renewal clause contained in their policy, as this will allow you to receive the same terms and conditions of your existing deal when it comes to renewing your insurance in the future. This clause would be ideally suited to younger families, who often acquire shorter insurance terms and as such would benefit from the continuity provided by a renewal clause. You should keep in mind that attaining this clause will come at an extra cost, so evaluate your situation in order to make an accurate value judgement about its applicability to you.

Critical illness and life cover

Critical illness policies will pay your dependents out a lump sum of cash in the event that you are officially diagnosed with a serious and potentially fatal disease. Not all illnesses are included within critical illness cover, and it is worth asking your provider about their company policy surrounding this area to make sure you are getting value for your money. Critical illness policies can usually either be attached as a bonus feature to your deal or acquired separately, so you will need to ascertain whether your underlying apprehension over your health warrants paying the expensive long-term costs of obtaining cover of this kind.