What Is The Best Life Insurance Cover For Me?
Life insurance is something much of our nation is without. A poll by YouGov of 4,112 people across the nation shows that 19% of those asked about why they don’t have any type of life insurance say it’s because they can’t afford it.
Truth is, there’s more to insurance than meets the eye because the most affordable will be a decreasing term life insurance policy, which technically speaking, isn’t a policy for life as you may think of it, as being payable for life.
Term life insurance doesn’t mean you’ll be committing to making monthly premiums for the rest of your life. It means you’ll be committing to the monthly premiums for the duration of time you hold the policy. And you can link that to your mortgage repayments. That can be five years, ten years, or as long as 25 years.
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Whatever time period you need, you can protect your family from a hefty bill by linking it to your mortgage value. Whole of Life insurance is more expensive and if you’ve been quoted a fairly high price for life insurance in the past leading you to think you can’t afford it, it’s likely been for a whole of life policy. Those are more expensive.
On the more affordable scale of insurance, term life insurance is the one to investigate.
Another type of a life insurance product is Critical Illness Cover. In the study done by YouGov, there were a further 19% of respondents that said they don’t have life insurance cover because they wouldn’t gain personally. If you want to see personal gains, this is the only type of life insurance that will pay out when you’re diagnosed with a critical illness. The other two (term and whole of life) will only pay upon your death therefore it’s for your loved one’s gain and not your own.
Increasing or Decreasing Cover?
As well as buying either a Term or Whole of Life Insurance policy, there’s also the option of having increasing or decreasing cover. Decreasing cover is the more affordable option.
Why would you decrease the value of your policy pay out?
To ensure your debts are covered like your mortgage repaid to keep a roof over your family’s heads. Decreasing cover is mostly used by linking it to what’s outstanding on your mortgage. The less you owe, the less is paid by the insurer, therefore, they’ve less risk involved and so can quote you a cheaper premium. It’s definitely worth thinking about taking a decreasing level of cover if you’re worried about affordability.
Because the monetary value of a decreasing life insurance product reduces over time as more payments are made towards the debt owed, the premiums aren’t as high.
Increasing cover is best for Whole of Life because it’s designed to rise with the cost of inflation. The cost of living twenty or thirty years from now will be higher. When you consider the prices of homes as things are currently, if you’ve any family, chances are they’re going to struggle to finance their first home.
With an increasing level of cover, the financial value of your policy will rise in line with inflation rates, ensuring that the monetary value of the policy is in line with the future cost of living.
Life insurance is a bare minimum of financial protection for your family.
Critical illness cover is ideal for the other 19% (of those polled) who don’t see the value in investing in life cover due to receiving no personal gain.
Of those polled 29% of respondents reported that they would consider life insurance if they could afford it. If you’re considering life insurance but feel affordability would be an issue – The most affordable product to look for is a Decreasing Term Life Insurance Policy. You may be surprised by just how affordable this level of cover is.