Low cost life insurance

 

Life insurance is essential for anyone with dependants to provide them with financial security – we explain who needs it and how to get the right low cost life insurance policy.

Everyone with dependants needs to protect their family if they die. There are several things you can do to keep the cost of life insurance to a minimum and make sure you have the right policy.

Life insurance (also known as life assurance) can protect your family in the event of your death and pays a lump sum within the length of the policy, say 20 or 25 years, or until retirement. There are two types of life insurance policy – level term and decreasing term insurance.

Level term life insurance pays out the same amount throughout the length of the policy. With decreasing term life insurance the amount the policy will pay out on death reduces in line with a mortgage. This means that decreasing term policies offer cheaper life insurance than level term policies, but the amount they pay out reduces over time.

A couple can choose to buy a joint life insurance policy or two separate policies. Although a joint policy will be cheaper than two single policies, in the event of one partner dying, a joint policy will pay out and the policy will end. With two separate policies the remaining partner will still be covered.

The older you are the more you will have to pay for life insurance. As premiums are normally fixed for the length of the policy, you should take it out sooner rather than later to get the cheapest price.