Keep these tips in mind

Choosing a life insurance policy can be a confusing process, which is why it is important to speak with an independent expert for advice on your requirements.  Here, TotallyMoney has compiled the five top tips to keep in mind when searching for a life insurance policy so that you can find the cheapest option for your requirements.

Make sure you really need it
Before you start looking for a policy, make sure you need one. It’s more important for some people to have life insurance than others – for example, of you have a mortgage and a dependent spouse and/or children, you really should have life insurance.

Which type of policy?
Depending on why you are purchasing life insurance, there are different types of policies to choose from. If want life insurance to ensure that your family is financially provided for in the event of your death, you should consider a level life insurance policy. A level life insurance policy will pay out a set lump-sum amount if you die within the term, providing an income for your family that can also be used to repay any outstanding debts, such as your mortgage.

If you are purchasing life insurance simply to repay any outstanding mortgage at the time of your death, you should consider a decreasing term policy. These policies decrease in value over the term in line with your outstanding mortgage balance.  Then, if you die within the term, the payout is sufficient to repay your mortgage and protect your dependents from the debt. 

There are various other types of life insurance policies available, so be sure to speak to an independent expert for advice tailored to your requirements.

Don’t over-insure
Finding a life insurance policy that is truly beneficial is about striking a fine balance between the size of the payout you want your dependents to receive, and the amount you can afford to pay in premiums each month.  Obviously, the higher the payout you want, the more expensive your monthly premiums will be.  And, while it is important to provide for your family in the event of your death, it is equally as important to not pay more than you need to for the policy, especially as you may never even need the insurance. See our article on calculating the amount of cover you require for more information.

Understand exactly what you’re getting
Make sure you know exactly what you are getting from your life insurance policy before you sign on the dotted line. The terms and conditions can be very complex, so it is vital to seek independent financial advice before and during your life insurance search, so that an expert can advise you on exactly what you are purchasing.

Shop around
The final tip is maybe the most important – shop around! Many people purchase their life insurance policies from their mortgage providers. This may not be the most competitive policy available, so make sure you compare the entire market before applying in order to find the cheapest option available. Speak to a whole of market broker for advice tailored to your budget and requirements.

Please note: this website, and the articles and information within it are based on journalistic research. It does not and should not be construed to constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research.  For more please refer to our terms and conditions of use.