With the new year upon us, it is an excellent time to organise your; home, finances and future plans. Making sure your family is financially protected could liberate you from the worry of leaving debts behind when you are no longer around.
Life insurance is an important part of everyone’s lives. It could provide your loved ones with a lump sum payment after your passing to help replace your income and cover large debts, like a mortgage.
This comprehensive guide on what life insurance you need in the new year was created to help you discover the right policy at the best price in 2024.
What life insurance is best for me?
There are many types of life insurance, each suitable for different needs and budgets. Depending on what you are looking to cover will depend on what is best for you.
A life insurance pay out can help cover finances such as:
- Funeral costs
- Mortgage and rent payments
- Leaving an inheritance
- Any remaining outstanding debts
- Replacing an income (towards bills, childcare, etc)
As well as your desired pay out amount, it is also important to consider your personal circumstances. For example, if you work in a high-risk occupation (working at heights, with dangerous equipment or in risky locations) then your policy could cost more.
Other factors that may affect your policy pricing include:
- Age
- BMI
- Smoking status
- Alcohol consumption
- Current health & wellbeing
- Medical history
- Lifestyle
These factors can affect your policy as insurers will calculate your premiums based on risk and likeliness of paying out.
It is important to find cover that is affordable and suits your needs. But what is the right policy for you?
Leading broker Reassured.co.uk enable you to compare quotes from the UK’s best life insurance providers completely free of charge.
Below are the four most popular options:
Level term life insurance
Level term life insurance is a policy with a set term and your cover amount will stay the same during this time. Level term is one of the most popular policies as you are able to help cover; mortgage payments, living/childcare costs and other regular expenses.
Key factors:
- Provides cover for a specified term (usually from 2-40 years)
- Lump sum value remains the same throughout the policy lifetime
- Maximum sum assured typically up to £1,000,000
- Will only pay out if you pass away during the term
- Fixed monthly premiums
Decreasing term life insurance
Decreasing term life insurance is an ideal policy for those with a repayment mortgage as your sum assured (pay out) reduces over the policy lifetime. Similarly to level term cover, decreasing term is cover set for a specific period.
Key factors:
- Provides cover for a specified term (usually from 2-40 years)
- Lump sum value reduces throughout the policy lifetime
- Maximum sum assured typically up to £1,000,000
- Will only pay out if you pass away during the term
- The cover amount reduces each month or annually (depending on your insurer)
- Fixed monthly premiums
Whole of life insurance
Whole of life insurance provides cover for the rest of your life with a guaranteed pay out. Although an expensive option as premiums are required for the rest of your life, many opt for whole of life as you can secure a bigger pay out than with over 50s cover offers.
Key factors:
- Provides cover for the rest of your life
- Will pay out a fixed lump sum
- Maximum sum assured typically up to £1,000,000
- Guaranteed pay out
- A more expensive option
- Fixed monthly premiums
Over 50s life insurance
Over 50s life insurance is a policy suitable for those aged 50-85. It is a popular option as acceptance is guaranteed. It is perfect for those looking for a smaller pay out and/or those with a pre-existing health condition who may have previously been declined for a policy.
Key factors:
- Guaranteed cover for the rest of your life
- No medical information is required
- Maximum sum assured usually up to £20,000
- Can be a more affordable option for those with pre-existing medical conditions
- Guaranteed acceptance for those aged 50-85
- Some insurers will require your smoking status
- Fixed monthly premiums
Top tips for finding an affordable policy in 2024
To find a suitable policy, you will need to assess your personal circumstances and what you’d like to cover. There are many ways to find affordable policies, all from the comfort of your own home:
- Going direct through an insurer
- Using a life insurance broker to compare a variety of quotes
- Your own personal research from online websites
Regardless of which life insurance policy is best suited for you, it is important you take time to compare quotes and explore your options before making your decision.
It is also vital to make sure you secure life insurance sooner rather than later as the younger you are (and the better health you have) the cheaper your policy can be.
For more information visit: https://www.reassured.co.uk/
