by Susan Paige
The internet changed our world forever. In today’s world of online shopping, it seems like anything can be bought – including life insurance. Something that once took hours can now be done in minutes with getting quotes becoming easier and easier. This guide will help you understand the ins and outs when searching online for life insurance. We’ll be looking at:
- The main types of life insurance policies
- Things to know before shopping online for life insurance
- Online life insurance: Getting a quote
- How to reduce the cost of online life insurance quotes
Types of life insurance
There are two main types of life insurance – Whole life & term life insurance.
- Whole life insurance – as the name would suggest, covers you for the whole of your life as long as you keep paying premiums. When you eventually die your beneficiaries will receive a lump-sum payment.
- Term life insurance – Unlike whole life, these policies last for a fixed length (i.e. 30 years). Your policy will only pay out unless you die within the length of the policy, otherwise, you’ll need to take out another policy.
Whole life policies are usually more expensive than term life policies. This is because the whole life policy guarantees a lump sum pay-out, whereas term life only covers you for an agreed period. There are additional add-ons to your policy you can get such as Critical Illness Cover.
Things to know before shopping online for life insurance
Before searching online for life insurance there are some things you need to be aware of.
Do some research
Just like making any big purchase, you need to know what you are buying and if it’s right for you. For example, when you buy a car, you don’t just see a car and buy it, you’ll want to know the cost, strengths and weaknesses and other alternatives available to you. The same goes for life insurance, decide what policy is best for you and how much cover you need.
Understanding you and your families needs
You need to understand why you are taking out life insurance in the first place. It’s more than likely you want to take out a policy to protect your family when you are gone.
But is this to help them financially, so they can pay out loans and debts like a mortgage? Or do you simply want to leave them with a cash gift to put towards their future? The type of life insurance you need is down to your situation, both family and financially.
Check if you already have cover
You may already have life insurance cover by your employer. Some companies and organisations will offer their employees a death in service benefit which works similar to life insurance. If you die whilst working for the company, they will pay out a tax-free lump sum to your family. This is usually your annual salary multiplied two to four times.
Even if your employer offers death in service benefit, it’s still worth taking out life insurance. This is because, if you were to leave the company at any point – which is likely, then you’d lose your cover.
With so many life insurance providers around, it can be overwhelming when trying to find the right one. Make sure you’ve covered all your options as you don’t want to take out a policy from a provider only to discover a cheaper, more convenient one from another.
If you’re unsure about buying life insurance, speak with an insurance broker or financial advisor. They can help you find the right policy for the best price, getting a quote in minutes. Countless comparison sites can help you work out which provider is offering the best deal for you.
Online life insurance: Getting a quote
Before buying life insurance, you’ll need to get a quote. This is done through an insurance provider or broker to estimate how much you are likely to pay for life insurance. Providers will compete with each other, offering lower-valued quotes. Let’s say a provider advertises that you can get a quote starting from £10 a month. This doesn’t mean that if you request a quote they’ll offer you a policy for the same amount.
There are factors that go into determining the cost of an insurance policy – but we’ll get to those in just a sec. Just because a provider advertises a quote cost, it doesn’t guarantee that you’ll pay the same some people automatically pay more for insurance – such as older people or smokers.
How to reduce the cost of online life insurance quotes
We all want to save money where we can. When you apply for a quote for life insurance you’re insurance provider or broker will ask you some questions regarding:
- Your age – The older you are, the more it will cost
- Current health – sometimes family medical history if you have a condition
- If you are a smoker – Some providers can reduce premium policies if you quit
- Occupation – You may pay more if you work a dangerous job
- Lifestyle – How often you exercise or drink alcohol
It’s important that you answer these questions truthfully, if not you may lose your coverage. There are a few ways to reduce the cost of your premiums such as:
- Getting cover when you are young – premiums will most likely be cheaper the earlier you take out a policy
- Quit smoking – Not only does smoking take years off your life, but it also affects the cost of your life insurance. Though quitting sounds a lot easier than it is, you’ll soon see the benefits.
- Take out a joint policy – A joint policy allows two people (Usually partners or spouses) to share a single policy, rather than taking out individual policies. This can work out cheaper and easier than you both buying single policies.