Having adequate life insurance in place ensures that the future financial stability of your loved ones is protected.
Life insurance premiums are calculated based on the level of risk you pose to the insurer, often leaving many disabled members of the public questioning how they can afford cover due to their disability.
Firstly, it is worth noting that not all disabilities will affect the cost of your life insurance; only if it brings with it a hindrance to your life expectancy.
Secondly, even in this instance, there are still some steps you can take to make your monthly life insurance premiums more affordable.
Here are award-winning life insurance broker Reassured top 5 money-saving tips.
When you consider living costs are estimated to be £570 more each month if your disabled, it is clear that life cover is vital. (Source: https://www.scope.org.uk/campaigns/extra-costs)
1. When you arrange cover
The age you are when arranging life insurance will strongly affect your premiums.
More favourable rates go to those who are younger due to their longer life expectancy and usually good health.
As a result, it is best to arrange life insurance as soon as possible to avoid increased premiums as a result of your older age.
Afterall, you will never be younger than you are today.
2. How much cover you arrange
When arranging life insurance, it can be tempting to go for the maximum amount of cover available to you.
However, the larger the sum assured, the more expensive your life insurance monthly premiums will be.
Therefore, to avoid paying for more protection that you require, it is best to determine exactly what aspects of your life you are looking to cover.
For example, the sum of your mortgage, outstanding debts, family living costs and your funeral.
This will prevent you paying more on a monthly basis for a level of protection you do not require.
3. Type of cover
There are various types of life insurance available, each suited to protecting certain aspects within your life.
However, the type of life insurance you arrange will cause a variation in price.
Term life insurance tends to be cheaper as it is only valid for a specified amount of time meaning that a pay-out isn’t guaranteed.
There are two types of term life insurance; level and decreasing.
Level term will provide your loved ones with a lump sum payout if the worst were to happen to you. It is ideal for covering expenses that don’t change, such as; an interest-only mortgage, daily living costs or funeral costs.
Decreasing term, on the other hand, provides a lump sum payout which decreases in value over the term of the policy. As a result, it is more suited to covering a repayment mortgage or large debt in your name.
Due to the diminishing risk to the insurer, decreasing term life insurance tends to be the cheapest.
Whole of life insurance and an over 50s plan, on the other hand, guarantee a pay-out.
Whilst the sum assured you can secure with whole of life is significantly larger than an over 50s plan, it does require you to provide medical information for acceptance.
An over 50s plan, however, provides guaranteed acceptance for all UK residents between the ages of 50-85 but will only allow you to secure a maximum of £25,000.
Naturally, due to the guaranteed pay out, whole of life tends to be significantly more expensive than term life insurance for the same level of cover.
Equally, due to the unknown risk to the insurer, an over 50s plan tends to be the most expensive form of cover.
Choosing the right type of life insurance cover will prevent you from paying more for a type of life insurance cover you don’t necessarily need in place.
4. Changes to your lifestyle
Certain aspects of your lifestyle can affect the amount you pay for life insurance.
These include your weight, smoking status, hobbies and occupation.
Due to the associated health risks, smoking and being overweight often result in you having to pay significantly more for your life cover.
Both weight loss and quitting smoking must be maintained for at least 12 months before seeing the benefit in your premium costs.
However, making these changes could significantly affect the amount you pay monthly.
Hobbies and occupation can also affect the amount you pay monthly, with those considered more risky, causing your premium costs to be inflated.
Therefore, changing your hobbies (and less likely your occupation), could help you achieve a more favourable rate.
5. Using a broker
The cost of premiums can vary significantly between providers, making it important to compare quotes to ensure you receive the best deal.
Whilst this can be done independently, the process can be very time consuming and involves having to understand a multitude of industry jargon.
Equally, you could use a price comparison website. However, again, this requires an understanding of industry jargon and won’t necessarily provide you with the widest range of quotes.
Using an FCA regulated broker will allow you to compare a wide range of quotes from various providers and staff will be able to fill in the application on your behalf.
This removes the need for understanding the jargon and also provides opportunity to fully understand what it is you are purchasing to provide peace of mind.
Furthermore, non-advised brokers will provide you all the information you need to allow you to make an informed decision and not even charge you for their services.
Equality Act 2010
The Equality Act 2010 ensures that insurers cannot discriminate against you simply for being disabled.
Under this law a disability is defines as ‘a physical or mental condition which has a long-term and substantial effect on your daily life‘.
Go save money
So, as you can see, even if you are disabled there are a wide variety of ways to ensure you get the best deal on your life insurance.
Implementing each of these steps can ensure you get the most affordable price for life insurance.
So, what are you waiting for?