Life Insurance Tips & Top Insights For 2024

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 6th July 2024

life insurance tips

If you have recently tied the knot, welcomed a new baby, or are already raising children, you probably should consider life insurance.

Life insurance is something everyone should think about, regardless of age, status, or family circumstances. Why? Because there are so many aspects of life that are outside of our control, but planning for your family’s future in the event of a worst-case scenario is something you can control right now.

We all have the best intentions, ambitions, and ideas regarding road-mapping our lives. Everyone has a mental picture of how our futures will play out.

Career, family, and a big house in the countryside with all the trimmings. The chances are your life will play out exactly as you hope it to, and everything will go according to plan. Fingers crossed, of course.

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Everyone Needs a Backup Plan

But what if it doesn’t? Having a ‘Plan B’ is always recommended in life, but never more so than when it comes to your family’s well-being and safety if you are no longer around.

Life insurance protects your family — typically your spouse and children — if something happens to you. If you are the primary income earner and your spouse or children rely on you financially, ensuring they can maintain their financial stability in the event of your absence is essential.

However, with many life insurance companies around these days and the various types of policies available, it can be a little confusing. How much life insurance do you need, for example, and what type? What information is required of you, and how do you find the best deals?

To make the process less head-scratching, We thought a few life insurance tips might help get you started, so we have prepared a list of useful tips to be aware of when looking for life insurance. 

In no particular order, let’s start with our ten valuable life insurance tips and get you on the road to peace of mind through this essential requirement.

Assess Your Current Financial Situation in Detail

Evaluating your current financial situation thoroughly is crucial when determining the appropriate amount of life insurance coverage. This might be the most important consideration when arriving at a suitable figure for cover. 

Exercise a little diligence and careful thought with this stage of the procedure, and you will ensure that your loved ones are well provided for in the event of your passing, with nothing left to chance.

But how does one determine a suitable figure? Fortunately, the process is quite simple. You need to take stock of your current obligations and any future considerations to get a clear picture.

The following aspects should be central to this stage (along with any others you can think of)

Outstanding debts: Not to state the obvious too much, but the main point in obtaining life insurance is to ensure that your loved ones will not struggle financially after your passing.  To that end, all debts need to be accounted for.

List all current bills, including credit card balances, mortgages, car loans, and school loans. In an ideal world, your life insurance policy would cover these debts fully, sparing your family from dealing with them after your passing.

Future expenses: As we live out our lives, financial obligations always change and evolve. By noting future expenses, you are sparing your loved ones any unnecessary strain further down the line.

Consider the future expenses your family may face, such as children’s education, weddings, special medical needs, and other significant life events such as family planning. 

Ensure that your life insurance policy provides sufficient coverage to help cover these expenses, allowing your loved ones to maintain the standard of living they deserve—a standard that you feel comfortable leaving them with.

Income replacement: Estimate the income your family would need to substitute if you could no longer support them. This may encompass your wages, bonuses, and other recurrent income sources such as investments.

Your life insurance should factor in this income loss, allowing your family to retain financial equilibrium. Remember, the whole point here is to ensure that the financial implications of losing you are adequately hedged against.

Funeral and final expenses: This is an area not always considered by consumers planning for life insurance, but it should be.

The cost of a basic UK funeral (at the time of writing) is in the region of £5000. That is a heavy burden to leave your family with. In addition, other final expenses related to your untimely passing could possibly even double that figure.

By including these funeral costs in your life insurance coverage, you can ease the financial burden on your family during an already challenging time. That’s without even considering that it would be nice to be blessed with a comfortable funeral for all parties involved. 

Emergency fund: Any financial strategy must include an emergency reserve. Your life insurance policy should offer adequate protection to assist your family in creating or maintaining an emergency fund so they can deal with unforeseen costs without being put under additional strain.

An emergency fund, after all, is something you should probably maintain in life – your passing should be no different.

Inflation: Even though it’s impossible to forecast the future, it’s important to consider how inflation affects your family’s financial requirements.

For your loved ones to maintain their standard of living after your passing, make sure your life insurance policy considers the rising cost of living. Again, this should be an obvious consideration – but you would be surprised how many people fault to take this into account. 

If a loved one passes tragically early in life – in their early 30s – the remaining spouse could live on for another 60 years. It is a sobering thought, granted. However, it is necessary to be aware of this.

You can choose the right level of life insurance coverage for your unique needs by carefully considering these criteria and evaluating your present financial status. This all-encompassing strategy will help preserve your family’s financial future and give them the support and security they need in the case of your unfortunate demise. 

Leave nothing to chance, and ensure you have accounted for every eventuality. Your family will be in safe financial hands going forward.

Factors Affecting Life Insurance Premiums

FactorDescriptionImpact on Premiums
AgeThe age of the policyholder when applying for coverage.Older individuals typically have higher premiums.
HealthThe policyholder’s overall health, including pre-existing conditions.Better health generally leads to lower premiums.
Smoking StatusWhether the policyholder is a smoker or non-smoker.Smokers usually have higher premiums.
OccupationThe policyholder’s job and associated risks.High-risk occupations may result in higher premiums.
Policy TypeThe type of life insurance policy chosen (e.g. term, whole, universal).Premiums vary based on policy type and coverage.

The Benefits of Purchasing Life Insurance When You’re Younger

While this is a practice frequently overlooked by younger people, lower rates and more thorough coverage are just two benefits of buying a life insurance policy when you’re younger.

That is common sense, but the problem with this strategy is that life insurance is often considered ‘something to worry about later in life’.

Savvy ‘youngsters’ will benefit greatly from ensuring life insurance is boxed off and dealt with early in life, just as they will with a retirement strategy in place nice and early. However, the benefits are not limited to lower rates and more extensive coverage.

There are others, too. Let’s take a look at what they are:

Reduced premiums: The applicant’s age and health are just two of the many considerations that life insurance companies use to determine premiums.

Lower mortality rates and greater health among young people lead to cheaper premiums. By submitting an early application for insurance, you can lock in these lower rates for the duration of your policy.

Longer coverage period: If you buy life insurance when you’re younger, your coverage will be in force for longer. You and your loved ones may feel more at ease knowing they will have financial support in the case of your passing.

Easy qualification: As you get older, it’s more probable that you’ll get health problems that could make it harder for you to get life insurance or raise the cost of the policy. You boost your chances of being approved for better-priced coverage by applying when you’re younger and healthier.

Financial security for your family: Acquiring life insurance coverage early in life can ensure your family’s financial security should the unthinkable happen to you. If you have dependents who depend on your income or if you intend to create a family in the future, this may be very crucial.

Flexibility to change coverage: While you’re younger, it is possible that you don’t have a clear idea of your future monetary requirements.

Early life insurance purchases allow you to build a foundation of protection that may be modified as your needs evolve. This enables you to guarantee that your coverage consistently reflects your changing demands.

Potential for cash value growth: A cash value component that can increase in value over time is often included in whole-life and universal life insurance plans if you choose to purchase one of these types of coverage.

By commencing your policy when you are younger, you give the cash value more time to grow and can use it as a resource for money in the future.

Generally speaking, when you purchase life insurance at a younger age, you may be eligible for lower rates, longer coverage, and simpler underwriting. This strategy also guarantees the financial security of your family and allows you to vary your coverage as your circumstances and financial demands evolve. 

Don’t put off getting life insurance for too long; as you get older, your premiums can increase, and getting coverage might be harder. Those who commit to life insurance at a younger age will never regret it. Those who neglect it and wait for much later in life probably will. 

How to buy life insurance wisely

Tips for Choosing Life Insurance in the UK

Assess Your NeedsConsider your financial obligations, dependents, and long-term goals before choosing a policy.
Compare QuotesObtain quotes from multiple insurers to find the best policy and premium for your needs.
Review Policy ExclusionsUnderstand what circumstances are not covered by your chosen policy (e.g., specific health conditions or high-risk activities).
Choose a Reputable InsurerSelect an insurer with strong financial ratings and a good reputation for customer service.
Regularly Review Your PolicyReview your policy every few years or after significant life events to ensure your coverage remains adequate.

The Importance of Considering Policy Add-Ons and Riders

Life insurance policy enhancements, commonly referred to as ‘riders’, hold the potential to substantially improve your coverage by offering supplementary benefits and safeguards tailored to particular situations. These riders grant you and your family invaluable reassurance and financial stability. 

Here’s a closer examination of why it’s crucial to contemplate these add-ons:

Personalisation: Riders enable you to tailor your life insurance policy to accommodate your distinct requirements and apprehensions. Incorporating riders into your policy guarantees coverage that addresses the risks and scenarios most pertinent to you and your loved ones.

Critical Illness Rider: This rider furnishes a one-time payment upon being diagnosed with a qualifying critical illness, such as cancer, heart attack, or stroke. This advantage can alleviate medical expenses, lost wages, and other costs stemming from a grave illness, lessening the financial strain on you and your family during difficult times.

Disability Income Rider: This provision supplies a monthly income if you become disabled and cannot work due to injury or sickness. The benefit compensates for lost earnings, enabling you to fulfil financial responsibilities and sustain your family’s way of life.

Waiver of Premium Rider: In the event of disability rendering you incapable of working, a waiver of premium rider guarantees that your life insurance policy stays active without necessitating premium payments. This helps secure your family’s financial prospects without imposing additional stress on your finances.

Accidental Death Benefit Rider: This rider awards an extra payout to your beneficiaries if your demise is accident-related. This supplementary financial aid can support your family in managing the unanticipated financial repercussions of an accidental death.

Guaranteed Insurability Rider: With this provision, you can augment your coverage without undergoing a new medical examination or supplying further health information. This can prove especially advantageous as you grow older or encounter significant life milestones warranting increased coverage, such as marriage or being a newlywed, childbirth, or a job promotion.

Return of Premium Rider: If you choose a term life insurance policy, a return of premium rider permits you to obtain a refund of the premiums paid if you outlive the policy’s duration. This feature appeals to individuals seeking protection and the possibility of a return on their investment.

Don’t neglect the advantages of incorporating riders into your life insurance policy.

These policy enhancements offer added security, financial stability, and reassurance for you and your family. They address specific needs and situations that may emerge throughout your life. Thoroughly assess available riders and opt for those that best correspond to your individual necessities and worries.

Tips for Reducing Life Insurance Premiums

Buy EarlyPurchase life insurance when you are young and healthy to lock in lower premium rates.
Maintain a Healthy LifestyleImprove your health by exercising regularly, maintaining a healthy weight, and avoiding tobacco use.
Choose the Right PolicySelect a policy that meets your needs without excessive coverage or unnecessary riders.
Shop AroundCompare quotes from multiple insurers to find the best policy and premium for your situation.
Annual Premium PaymentsPay your premiums annually instead of monthly to potentially save on administrative fees.

Be Ready to Answer Essential Questions

When applying for life insurance, you should understand that the application process involves answering various questions about your health, lifestyle, and family medical history.

These questions help insurers assess your risk level and determine your most suitable policy and premium. Providing accurate and comprehensive information is essential to secure the best deal possible.

It will make your application far smoother and hassle-free if you prepare these in advance.

Here are some examples of questions you might need to be prepared for:

  1. Personal information (age, gender, occupation, etc)
  2. Health history (any pre-existing conditions, previous illness)
  3. Lifestyle habits (smoker, drinker, diet, general fitness)
  4. Family history (hereditary conditions etc)
  5. Hobbies and activities
  6. Financial information (salary earned, investments)
  7. Insurance history (any previous denials of coverage, previous coverage)

Compare Quotes From Multiple Providers

Gathering and comparing quotes from many providers is an important step when looking for life insurance to make sure you get the greatest deal on the most appropriate policy.

You can better grasp the life insurance market and the variety of policy alternatives by shopping around and comparing policies from different insurers. This knowledge can help you make a better-informed choice when choosing your insurance.

This is where Insurance Hero can help you save time, a great deal of effort, and shopping around by doing the hard work for you.

As an independent company with no alliances or partnerships, we help thousands of people compare plans from the leading life insurance companies, finding policies that meet all expectations.

Simply provide us with some basic details, and one of our experts will expertly navigate the life insurance market for you, looking for a policy that suits your personal requirements perfectly.

Obtaining life insurance isn’t a particularly complicated process, but it can be a little time-consuming and is not quite as straightforward as it once was.

With so many life insurance companies on the market offering an incredibly wide range of policies, options, riders, and benefits, Insurance Hero is expertly placed to find the most suitable deal without the headache that often comes with hunting around from provider to provider.

Getting and evaluating quotations from several providers is essential in locating the greatest life insurance plan for your requirements.

Life insurance is an important task requiring comparisons and a careful approach, matching each consumer with the provider who best suits their needs

Our strategy really helps you receive ideal protection at a price you will be comfortable with while also utilising any accessible specials or novel policy provisions.

Types of Life Insurance Policies

Policy TypeDescriptionProsCons
Term Life InsuranceProvides coverage for a specific term, usually 10, 20, or 30 years.Lower premiums, easy to understand.No payout if the policyholder outlives the term.
Whole Life InsuranceProvides coverage for the policyholder’s entire life.Guaranteed payout, cash value component.Higher premiums, complex.
Joint Life InsuranceCovers two lives, typically spouses or partners, with one policy.Adjustable premiums, and investment options.Payout occurs only after the first person’s death.

Understand Different Policies

Grasping the variety of life insurance options is vital before you pick the one that’s right for you. Life insurance policies generally fall into two categories: term life and whole life, each offering distinct advantages.

Term life policies cover you for a set time frame, usually 10 to 30 years. These policies are often more budget-friendly and uncomplicated since they only provide a death benefit if you pass away during the term.

If you live beyond the term, the policy expires without any cash value or payout. People frequently choose term life policies for temporary protection during key life moments, like raising children or paying off a home loan.

Conversely, whole-life policies give you coverage for your entire life (as long as you pay the premiums, of course!) These policies typically have a cash value component that accumulates over time, allowing you to borrow against it or withdraw funds for various reasons, such as retirement or educational costs. 

Whole-life policies are more costly than term life due to their permanent status and the cash value feature. They’re a good fit for individuals looking for long-lasting financial security and a potential source of additional income.

Knowing the distinctions between term life and whole life policies is key to finding the policy that aligns with your needs, financial objectives, and personal situation. 

For a slightly more extensive explanation, we have prepared a short article on the different policies available.

If you still find yourself confused, that is why we are here. Feel free to call our dedicated team, and one of our experts will guide you through the various options available for your specific needs. 

Review Your Policy Regularly

For many people, obtaining a life insurance policy is something that can be ‘ticked off the list’ of important things to do before being almost entirely forgotten about for many years.

Most people do not bother to check over the policy once it has been taken out, but we advise against it.

Reviewing your life insurance policy regularly is important, especially after significant life events, such as marriage, the birth of a child, or a change in income.

Keeping your policy up to date ensures that it continues to meet your changing needs. Life rarely remains the same year after year, decade after decade. Circumstances change, and a policy you arranged ten years ago might no longer be perfect for you.

Stay on top of it, check the policy once in a while, and make sure the structure and benefits fall in line with your current circumstances. 

Maintain a Healthy Lifestyle

Another obvious one, you might agree, but maintaining a healthy lifestyle can positively impact your life insurance premiums, so it is worth mentioning. Insurers consider factors such as your weight, smoking habits, and overall health when determining premiums.

By staying healthy, you can increase your chances of securing lower rates and securing a policy with greater benefits. If we are being honest, a healthy lifestyle is something we should aspire to, with or without a life insurance policy!

Be Honest!

Ok, we mean no offence in suggesting this as a tip! Of course, you are going to be honest in your application. However, you might be surprised at how many fibs are told through life insurance applications. The problem is that invariably, these fibs are liable to backfire later down the line.

It is of utmost importance to be truthful and open when filling out a life insurance application. This ensures the policy’s validity and delivers the desired financial protection for your family members.

 While applying for life coverage, you must furnish precise and comprehensive data regarding your personal information, health status, way of life, and familial medical background. By doing so, insurance providers can accurately gauge your risk and offer the most fitting policy and premium.

Neglecting to reveal critical details (such as existing medical issues or a history of tobacco use, for example) might lead to serious ramifications.

If an insurance company uncovers discrepancies or false statements, they can nullify your policy, reject submitted claims, or modify your coverage and premium rates. In the direst situation, this could deprive your family of the financial assistance they might be relying on after your passing. 

Consider a Joint Policy

A joint life insurance plan encompasses two individuals within a single policy. Such an arrangement simplifies matters for a couple, as they only need to collectively manage a single premium payment.

When applying, it’s necessary to include information about you and your partner. The premium costs are calculated based on the risk you both present to the insurance company.

Risk elements for each party in the joint policy are considered. For example, even if one person has a pre-existing medical issue and the other doesn’t, the premium would still rise due to that condition.

Generally, if both policyholders share comparable age, health, and smoking habits, they may find financial savings by opting for joint life insurance instead of single policies. 

Wrap Up

We at Insurance Hero know a thing or two about life insurance. If you follow the life insurance tips and ideas provided, your road to family protection will be uncomplicated and hassle-free.

And remember, if you want us to take all of the burden in your life insurance shopping endeavours, our team of experts will do all of the heavy lifting for you by hunting around for life insurance tailored to your specific needs. 

Life insurance does not need to be complicated, and with Insurance Hero, it won’t be. Get in touch today if you need help finding a great policy with a provider matched to your unique needs.