buying life insurance

8 Questions to Ask Before Buying Life Insurance

Each year more than half a million people die in the UK. None of us likes to think about what will happen when we die. However, sometimes it’s important to take a moment to think about this, especially if we’re leaving loved ones behind.

This is partly because not every death in the UK is the result of old age. In fact, 28% are caused by cancer—a disease that affects people of all ages. So it’s surprising, then, that only 30% of households in the UK have protection from life insurance.

Buying life insurance is a way of supporting your loved ones financially if you should pass unexpectedly. You pay small monthly premiums to keep the policy active and when you die they will receive a lump-sum payment. This won’t make up for their loss, but it will provide some much-needed relief and security in the months and years after your death.

If you’re thinking of getting life insurance, then you need to know exactly what to ask to make sure you get the right life insurance coverage for you. In that case, you’ve come to the right place. Read on to find out what you need to ask when you’re buying life insurance.

1. How Much Life Insurance Do I Need?

Deciding the amount of insurance that you want is pretty much up to you. It really depends on how much you want to leave for your family and how much you can afford to pay in premiums. 

For example, let’s say you are the breadwinner in the family or have children. In that case, you may want to leave behind considerably more to help support them following your death. This is because your death will have a significant financial impact on your loved ones.

Your premiums will be more expensive the more you choose to leave behind. Though, underlying health conditions and your lifestyle may also affect your premium cost. For example, smokers and ex-smokers tend to have more expensive life insurance premiums. 

2. What Do Different Types of Policies Cover? 

There are two main types of life insurance policy to go for: fixed-term and life long.

As you can probably imagine, a fixed-term life insurance covers you for a set period of time. For example, it could cover you from the age of 25 to 60. 

This type of policy is popular if you have young children who you want to provide for in the case of your death. By the time you’re 60, they will be grown and need less financial support so you may not need to leave behind as much. 

Life long insurance policies cover you right the way up to your death. This is a good option if you want to keep a set premium over the course of your life.

3. Will My Monthly Premium Ever Go Up? 

As we’ve already mentioned, your monthly premium depends on several factors including: 

  • Your age
  • Your medical history
  • Your family’s medical history
  • Your lifestyle choices (e.g. smoker/non-smoker) 
  • How much you want to get insured for

Big risk factors in your medical history and your age can affect your premiums. The older you get the higher the premiums. 

However, if you sign up for a fixed-term policy your premiums shouldn’t go up during the course of the term. If you sign up for a life-long policy, it is always worth asking if anything will affect the price of your monthly premiums.

4. What Do I Do If You Can’t Pay My Premiums? 

It’s always worth asking what a company’s options for how to pay premiums if your financial situation changes. Some companies can offer your options to help until you are able to pay again, such as taking payments from your “cash value” pot (more on this later!) 

If you do find yourself struggling to pay your premiums, it is important that you get in touch with the insurance company as soon as the problem arises.

5. Are There Any Clauses I Should Know About? 

Most life insurance policies contain clauses although a lot of these relate to this information that you provide them with. For example, if you don’t disclose an underlying health condition this will make the policy void. 

There is usually also a clause that states the policy won’t pay out if you die by suicide in the first year after the policy’s start date.

6. Should I Get a Joint Life Insurance Policy?

If you are married or have a partner, then you may want to consider getting a joint policy rather than two individual ones. 

Joint policies protect you in the same way that individual ones do. If one or both of you die the policy will pay out a set amount of money for each person.

However, you may be able to get a better deal on your monthly premiums with a joint insurance policy rather than on two individual ones. So if you have a family with your spouse or partner, you could save some money by choosing a joint policy instead.

7. What Is “Cash Value” and How Can I Use It? 

Some insurance policies build something called “cash value” over time. This is a small amount of money which gets set aside each month from your premium payment. 

Over the course of your policy, your “cash value” pot grows. You can access this pot at any time and use these “available cash value” as you please. This is the “cash value” minus any outstanding payments, such as unpaid premiums that you have on your policy. 

8. Can I Upgrade My Insurance Policy Later On? 

Some policies allow you to upgrade during the policy term. So if your financial situation improves and you can afford to pay higher premiums, this is a great option. 

Other policies with a fixed term will let you upgrade once the term is over. It is always worth asking about this before you buy.

Don’t Wait Around to Start Buying Life Insurance!

Buying life insurance is a simple and easy way to make sure you can look after your loved ones even if the worst happens to you. So what are you waiting for? 

Start your quote for your life insurance policy today!

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