In times of difficult economic times, finding affordable Life Insurance is a common factor to take into consideration when buying a policy for yourself or your partner.
This article will help guide you through three different ways of finding affordable Life Insurance. For simplicity, the term Life Insurance also applies to Life Assurance
Finding a Life Insurance quotation
Insurance comparison websites
A good place to start is to use some of the many different insurance comparison websites on the internet. You will be asked some basic information and then the website will obtain a number of quotations.
Beware– not all companies that offer Life Insurance allow their policies to be listed on these websites. Furthermore many websites will only give details of policies from a few different companies. Therefore you may need to use more than one comparison website to get a wide range of quotations.
Using a Financial Adviser
Depending on the status of the financial adviser (see separate page on Financial Advisers), the range of quotations will vary. A truly independent Financial Adviser will be able to search the whole of the market to find you the most affordable Life Insurance.
Going direct to an Insurance company
This is the least practical option. Whilst you may know the names of some Life Insurance companies, it is a time consuming process entering your details into each quotation calculator and you may not actually find the cheapest quote as you are unlikely to be able to find all the companies that offer Life Insurance.
How much Life Insurance cover I can get for a fixed amount?
Most insurance company websites will ask you for either the amount of Life Insurance cover you want or the premium you want to pay. If you have a fixed amount you want to pay, the website will give details of the amount of cover each of the listed Life Insurance companies will provide.
What does a Reviewable premium mean?
A common term used when looking at Life Insurance (and Life Assurance) is “Reviewable Premium”. Simply, at fixed points in the term of the policy, the Life Insurance company will review the premium to ensure that it is sufficient to maintain the cover.
The reason for the review is that the underlying cost of Life Insurance changes over time. In the 1980s the cost for providing life cover increased when there were worries about HIV and AIDS. Since then, with the improving health care provision and people living longer, the risks to Life Insurance companies have reduced, so the premiums have also gone down in price for the same level of cover.
What is waiver of premium?
Most Life Insurance policies will offer an additional benefit called Waiver of Premium for a small extra charge.
This benefit is simple, in the event of long term illness that prevents you from working, the insurance company will pay your premiums until you return to work, reach retirement (or a specified age) or the end of the term of the policy. This additional benefit is usually only offered when you take out a policy.
This article is for guidance only and must not be construed as advice. The contents of this article are aimed at the UK market, although many countries will have similar policies available. If you need advice you should refer to a Financial Adviser.