Since the introduction of the internet it has never been easier to compare life insurance providers, and to purchase policies online. However, it can still prove to be quite a difficult task to figure out exactly how much life insurance you might need, and exactly what type of policy best suits your requirements.
To find the most competitive quotes, and the most comprehensive life insurance packages it pays to shop around. Comparison sites make searching for the best quotes very easy, although bear in mind that not all insurance providers feature on all of these sites; use a number of different sites to gain access to a wide variety of providers. It is also worth noting that not all insurers sell their products via comparison sites so check out the websites of insurance companies who may have been recommended to you by word of mouth, or who you have used successfully in the past. In addition, life insurance can now be purchased from banks and retailers (including supermarkets), plus some credit card companies.
Traditionally, insurance brokers were the first port of call when looking to take out a new life insurance policy. A broker is still a good place to visit if you are unsure of the type of cover you need, especially if you require a quite specialised policy, but bear in mind that some brokers may charge for their services so check with them before you start how much this might be.
Life insurance policies vary quite dramatically in price with some starting at just a small amount per month, and others running well into triple figures. The amount that you are required to pay for your life insurance policy depends on a number of different factors namely, the amount that you would like to be paid out after your death, and the likelihood of anything adverse happening to you during the term of the policy. Insurers will ask you a number of different questions to ascertain how much of a risk your present including questions about you age, your marital status, whether you are currently a smoker or have smoked in the past, your health (including your weight and your family medical history), the type of job you do, and finally, the types of hobbies that you enjoy. In addition, if you are older the insurer may consult with your GP to find out additional information, and you may be asked to undergo a medical examination.
In general, you can work out how much cover you will need by taking into account your mortgage, any additional debts, the number of dependents you have and your income. Then think about what you would like your insurance to cover in the event of your death; this may include such things as your monthly outgoings, for example, utility bills, childcare costs etc. Alternatively, you may want to use the money to cover the cost of your funeral, or to leave as a lump sum to your loved ones.
Before taking out a life insurance policy check to see if you already have some amount of cover already in place as some employers include a death-in-service policy as part of your benefits package. If you do have this type of policy in place then simply deduct this amount from the figure that you have calculated that your dependents would need should you die. In general, most people find that they require cover of around 5 to 10 times their salary.
Finally, you need to decide how long you wish the policy to last. This could be the length of time until your mortgage is paid off, when your children finish school or university, or up to when you die.
It is vitally important that you are completely honest about your medical history when you apply for your life insurance policy. The majority of claims (around 97%) are paid out, but those that aren’t are usually due to undisclosed information. If a claim is made on your policy the insurance provider will look closely at your medical history and if they find any discrepancies they may refuse to pay out.
In order to make the most of our money many of us like to switch our service providers and financial products on a regular basis. If you are young and in good health then you may get a better deal if you shop around, but as we age and perhaps develop medical problems it will most likely be cheaper to continue with the policy we purchased when we were younger. Bear in mind that when you do take out your policy you are entitled to cancel it within 30 days and receive a full refund, so if you do find a cheaper policy on offer elsewhere during this time you can easily switch.
It is important that you keep your monthly life insurance payments up to date. If you are unable to work due to illness or injury for at least six months then there is a product available, for a small fee, that will cover your premiums called waiver of premium cover. Alternatively, you could take out another insurance policy that would cover your outgoings if you were unable to work.
When buying life insurance you need to shop around in order to find the best deals, and to think carefully about the type, and amount of cover that you need in order to protect your family should the worst happen.