As a family, it’s so important to have the right life insurance in place to protect your family financially if anything was to happen to you or your partner. If you don’t already have life insurance, it might be one of those things that you continuously push to the bottom of your ever-growing to-do list; below buying new school shoes, taking the kids to swimming lessons and to endless birthday parties.
It’s time to stop putting it off though. All you ever want to do is protect your family, right? This is the ultimate superhero move. Life insurance can keep your family safe when you’re no longer around – surely that’s something worth investing in?
And contrary to many people’s assumptions, it doesn’t need to be expensive. There’s a few things that you can do to keep costs down on your policy so it doesn’t feel like a dent in that all important wage package, because bringing up a family is expensive enough.
Take out a joint policy
If you’re part of a couple, then you could opt for a joint life insurance policy instead of two separate policies. Joint policies are cheaper, easier and less time consuming to arrange which ticks a lot of boxes for busy parents.
The only drawback with a joint policy is that it only pays out once. It’s unlikely – and horrible to think about – but if you and your partner were to be involved in a car accident, your family wouldn’t receive nearly as much money to take care of bills and debts as they would if there were two single policies to claim on. Another eventuality – and again, another horrible one to think about – but if you and your partner split up, you’ll need to cancel the joint policy and potentially take out your own and the older you get, the more expensive the premiums get.
Get it whilst you’re young
Which leads me on nicely to my next point – get life insurance while you’re young and healthy! It might seem a little backwards because when you’re young and healthy, you’re generally less likely to pass away, so why take out insurance? But that’s exactly why your premiums will be lower. You’ll be considered low risk to an insurance provider.
Another way to keep those premiums down is to lead a healthy lifestyle. Red flags for insurers include smoking and drinking to try and keep this to a minimum if possible. Plus, who doesn’t want to lead a healthy lifestyle and have bags of energy when they’re a parent? And if this is a work-in-progress, that’s okay too. Let’s say that you’re a smoker but you’re on the road to quitting. A year or so down the line, if you can prove to your insurer that you’ve sustained a healthier lifestyle for a long period of time, they may agree to cut your premiums.
Opt for decreasing term
When you take out life insurance, you choose between decreasing term or level term. Decreasing term is the cheaper option of the two. As the name suggests, with this product the payout that your beneficiaries would receive upon claiming decreases over the length of the policy. This is handy if you’d like your life insurance payout to be used to pay off your mortgage, as your mortgage also decreases over time.
With level term, the amount that would pay out doesn’t change over time – hence why it’s more expensive. It means that should you pass away towards the end of the policy term, your kids will still receive the full payout and so be able to pay off the mortgage, and have money left over. This is the preferable option for many of course, but only if budget allows for it.
If you can find a life insurance policy that’s £30 or less out of your monthly wage packet, that has to be worth the peace of mind and protection it offers your family, right? If anything were to happen to you, the last thing that they’re going to want to deal with is financial chaos and not being able to keep up the mortgage repayments.
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This is a collaborative post.