Life insurance is an important tool for any family, providing financial protection in the event something happens to you. Whether you’re buying term life insurance or whole life insurance, you should always get a quote before you apply for cover. In this article, we’ll look at how life insurance quotes work, the types of cover available, and how to buy a policy.
How does a life insurance quote work
To get a life insurance quote, simply fill out the online form provided by the insurer. Once submitted, the insurer will contact you to discuss your options and answer any additional questions you might have.
While filling out the form, you will need to specify details such as your age, health, occupation, smoker status, and the type of policy you want. Your provider will then calculate the estimated cost of your monthly premiums.
The key benefit of getting a quote is that it allows you to compare life insurance quotes side-by-side. With a life insurance quote, you can easily compare the premiums and benefits offered by various companies.
Before you can apply for a quote, you need to know which type of cover you want to buy. Each of these has its pros and cons, which we’ll discuss below…
Term life insurance
This is usually the cheapest form of life insurance available. However, the policy only lasts for a set number of years, which you agree upon with your insurer. The policy pays out a lump sum to your loved ones – providing you die within the term. If you survive the policy term, the cover expires, and you won’t receive any money for the premiums paid.
Term life insurance has three levels of cover:
- Level term – The payout value and premium rate remain fixed throughout the policy term.
- Decreasing term – Covers large payments, such as mortgages and other loans. The policy decreases over time as you make repayments.
- Increasing term – The payout value increases over time to stay level with inflation.
Whole life insurance
Whole life insurance is worth considering if you want cover for the long term. This type of cover provides a guaranteed payout no matter when you die, so there’s no need to worry about the policy expiring. When you die, the policy pays out a fixed lump sum, as well as offers fixed premiums. However, because the premiums are higher than term life insurance, this isn’t the ideal solution for everyone.
How much protection does my family need
When you buy life insurance, you’re protecting your loved ones financially in the event of your death. It ensures they won’t have to deal with financial issues after you’re gone.
You also provide them with some cash to help them through difficult times. For example, if you were paying off a mortgage on your home, your spouse could use the proceeds from your life insurance to pay off the outstanding balance.
It can provide support with:
- Mortgage repayments
- Rent costs
- School fees
- Medical bills
- Funeral expenses
- Household bills
If you die without life insurance, your loved ones could face significant financial problems. Without sufficient funds, they may have to sell their house, moving into cheaper housing in order to make ends meet. In addition, they may have to borrow against future earnings to pay off debts.
You’ll want to have a policy with a large enough pay out to cover your family’s finances for now and in the future. One way to do this is by working out home. Much of your income is used to support your family, as well as any financial commitments you are tied to, like a mortgage.
How much will life insurance cost
The next question is how much should I pay for my life insurance? The truth is that it depends entirely on your situation.
For example, if you’ve got no dependents, you can save money by opting for a cheaper policy. On the other hand, if you’d prefer to provide for your family, you’ll likely need to pay a higher premium.
There are a range of factors that determine the cost of your life insurance premiums, such as:
- Smoker status
- The type of cover you want to buy
- The proposed length of the policy term
There are a few ways to reduce the cost of your premiums, such as buying cover when you are young, or giving up smoking if you are a smoker. Keep in mind that the price of a policy doesn’t necessarily reflect its value. While a cheap policy may seem attractive, it may not protect your family as effectively as a more expensive policy.
How can I buy life insurance
If you’re looking to buy, there are two major options available:
- Directly through the company selling the insurance – You can purchase life insurance directly from the company that offers the cover. You can choose between different types of cover, including term life insurance, whole life insurance and critical illness cover.
- Through an independent broker who sells policies from different insurers – An independent broker can help you find the best policy to match your circumstances and budget. They sell these policies on behalf of their companies and earn a commission for each policy sold. Brokers don’t charge upfront fees, but instead, take a percentage of the amount you pay for your policy.
You can also buy policies through supermarkets, banks and post offices. Either way, be careful when looking for life insurance quotes online. Make sure you only go to reputable sites that are licensed and insured. Otherwise, you could risk losing your hard-earned money.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any financial decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.