Things You Must Know Before Buying ‘Affordable’ Life Insurance
Life insurance is something everyone needs, but not everyone has.
Few know the steps involved in finding the most affordable cover that covers what they need the policy to do without insurance firms adding clauses to block payouts.
Shopping around is always your best option, but you must know what you want. To help with that, some common issues arise repeatedly for customers seeking affordable insurance coverage.
The most notorious of policy types are listed below to help you to steer clear of them.
How to avoid taking out the wrong type of life insurance cover…
Premiums with built-in reviews
If you want super cheap life insurance, you’ll find that this will be the cheapest type of policy. The reason is that it’s liable to increase as your risk level rises. What starts as a very low monthly premium can hike drastically in as little as a few years because your health situation has changed.
Touch wood, nothing happens, but if you get a quote on a reviewable policy for only a few pounds per month and later have a stroke or something we all hope never happens, that reviewable policy will be reviewed, and your new premiums will be hiked.
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Types of insurance policies matter – A LOT!
Joint cover is an option many couples opt for. Are they the best, though?
The truth is that they mostly aren’t, though they can depend on individual circumstances. If you’re torn between a joint policy and a single life policy, go through an insurance broker or some type of intermediary to be certain you get independent and impartial advice.
The prices between a joint and single life policy are not much different. The payout is, however. Double, to be exact, simply because it is two separate policies, although the amounts covered can differ based on the cover level you take out.
Here’s what you really ought to think about, though.
Joint life cover pays out on the death of one named person, leaving the beneficiary without life insurance. Therefore, if you’re under 50, have a mortgage, and have a family, a joint life cover policy will likely provide sufficient funds to cover funeral expenses, debts, and mortgages. Still, once it’s gone, it’s gone.
In reality, you can consider a joint life insurance policy as financial protection if you lose your closest life partner. Once one person dies, the policy pays, and the beneficiary has no further coverage.
Given that the beneficiary will be older, you can guarantee a new single life term cover policy will be more expensive later in life due to the higher risk factor. Therefore, it can be in your best interests to take out two separate life insurance policies, as those will then pay out for both people, who’d otherwise only be paid out once when a couple have joint life cover.
Considering that the premiums aren’t much different between single-term and joint life insurance policies, you can understand why it’d be best to get impartial advice.
Seek charity assistance for specialist cover
You won’t be the first to have problems getting the right type of cover in place at an affordable price due to existing medical conditions.
When those are present, there’s usually a higher fee, or there’s a clause in your policy that prevents paying out on the death of a policyholder where the cause of death is linked to a pre-existing condition, such as a heart condition, neurological conditions, cancer, etc.
Where any medical condition is present, you can usually find a charity that specialises in that area. Cancer research is one example. The British Heart Foundation, Brain Research Trust and the Huntington’s Disease Association are others that offer support and assistance to people affected by the conditions they cover.
Whilst not every charity organisation will have advice specific to insurance, it can be a good resource to call on as it will have other members who have been met with the same problems. Some charities have partnerships with insurance firms to provide cover suitable for certain medical conditions.
What you need to know about is the Disability Discrimination Act, which includes the Equality Act. For insurance purposes, firms must consider the latest medical research; therefore, if it’s found that you have a curable illness and statistics show that your condition will lower your life expectancy, they cannot discriminate and charge you sky-high premiums.
They will seek more information by contacting your GP and other medical professionals you’re involved with to get the complete picture of your health and provide an appropriate quote. All insurer firms must do their due diligence and quote reasonably when medical conditions are present.
You have rights, so it’s best to go to a charity for free impartial advice first and then find a broker to assist in obtaining the right level of cover at the best price.
To find out more about the Equality Act, see the brief guide from the Chartered Insurance Institute.
The best way to find out about specialist insurance providers is to contact charity organisations, as they’ll know which companies best help their members. Whatever your medical condition, search for it online with the words ‘charity’ or’ charity organisations’. Find the website and reach out to them using the contact details they provide.
Don’t get dismayed to the point of dishonesty.
When you’re having trouble finding affordable cover, don’t get dismayed at higher premiums. There are workarounds for most situations, so you can get a good level of cover suitable to your needs without it costing a fortune.
Seek the assistance of a broker or advisor, and never even contemplate not disclosing certain conditions or declaring you’re a non-smoker when you are. It’ll get you lower premiums, but your policy won’t be worth the price of the printed paper.
When it’s discovered you’ve not disclosed critical information, policies will be void. Honesty always, and if you’re faced with hiked premiums, get advice from an independent advisor who is impartial to any insurance company and products, and they’ll help you navigate your options.
Related Reading:
Total & Permanent Disability Insurance (TPD)
Glossary Of Life Insurance Terms
Life Insurance Frequently Asked Questions
Steve Case is a seasoned professional in the UK financial services and insurance industry, with over twenty years of experience. At Insurance Hero, Steve is known for his ability to simplify complex insurance topics, making them accessible to a broad audience. His focus on clear, practical advice and customer service excellence has established him as a respected leader in the field.
