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Unfortunately, it’s natural for mums to be concerned about their loved one’s future and the recent Coronavirus pandemic has only added to our worry.
What COVID-19 has emphasised is the importance of having the right financial protection in place to ensure our family are provisioned for, whatever the future may hold.
Life insurance is simply a very cost-effective financial safety blanket for a worst-case scenario.
It provides a cash lump sum pay out to your loved ones should anything ever happen to you or your partner. From approximately 20p-a-day, you could secure up to £200,000 worth of cover protection, (obviously depending on your individual circumstances).
Your loved ones can use these funds to cover major financial commitments, such as:
- Mortgage repayments or rental
- Family living costs
- University fees
- Outstanding debt
- Childcare fees
- Providing an inheritance
- Funeral expenses
Life insurance is one of those things that many put off for another day. However, if the last 18 months has taught us anything, it’s that life can be very fragile and if possible, we should seize the moment.
Monthly life insurance premiums are calculated based on the level of risk you pose to the insurer. Or put another way, the likelihood of a claim. Therefore, generally speaking, the younger you are, the cheaper your cover will be.
The insurance jargon can also be pretty confusing for many. Maybe this is another reason why we put it off.
The below infographic from leading UK life insurance broker Reassured helps explain some of the key terms:
Whether you’re a young mum, an older mum, a stay-at-home mum or a single mum, life insurance is essential for protecting your family should the worst ever happen. But we never want to pay more than is absolutely necessary.
Below are our top tips for securing affordable life insurance…
1. Live a healthy lifestyle
It can be hard juggling parenting whilst taking the time to try and lead an active lifestyle. However, doing so can help you secure a cheaper monthly premium.
During the application process, you’ll need to provide certain information on your current health;
- Medical history
- Family medical history
- BMI/weight
- Smoking status
- Alcohol consumption
This information helps the insurer to paint a picture of your current health and wellbeing and, therefore, the level of risk you pose.
Could you lose a little weight or perhaps cut down on your drinking to save some money?
2. Secure cover when you are young
When it comes to the cost of life insurance, age is absolutely key.
So, it’s wise to take out a policy whilst you’re still young in order to secure the most favourable rate. You can then lock in a super-low monthly premium for 20, 30 or even 40 years, and even as your personal situation evolves (children, mortgage, marriage) you will be financially covered.
Unfortunately, the older you are, the more you’ll pay for your cover. This is because as we age, we become more suspectable to certain illnesses and therefore insurers mitigate this increased risk by inflating premiums.
3. Don’t take out more cover than you need
If your family is anything like mine, you will be on a fairly tight budget and taking out more cover than is required can unnecessarily eat into your finances.
Your life insurance should cover aspects of your life that you’d like to protect if you were no longer around to provide.
Think, mortgage repayments + family living costs + utility bills + university fees + childcare expenses + funeral costs = cover amount
The greater the cover amount (known in life insurance as the sum assured) the more your monthly premium will be. By taking the time to calculate the level of cover you actually need, you can avoid paying over the odds.
4. Consider joint life insurance
It is normal to share the mortgage, so why not your life insurance too?
Taking out a joint life insurance policy will save you between 25%-30% compared with the cost of two individual policies. So, if money is tight this could be a good option.
A joint policy covers both you and your partners lives simultaneously, there is one application form and you pay one monthly premium.
While this option could help you save money, it’s important to understand that a joint policy will only ever offer one payout. Whereas, two single policies, although more expensive, would offer two payouts and effectively double to coverage. If you have young dependant this extra money could be invaluable.
5. Compare multiple quotes from different insurers
As a mum it’s only natural that you’ll want the very best for your loved ones. Comparing life insurance quotes is an important step to securing the right policy, at the best available price.
Life insurance providers employ different underwriting criteria and as a result prices can vary wildly for the same level of cover.
You can use a comparison website to easily compare multiple quotes. A broker can also do the hard work for you, putting you in touch with the insurer most likely to offer the most favourable terms. They can also guide you through the entire application process.
Whichever method you choose, remember to compare quotes. Even a 50p saving each month over a 30-year term can add up to a significant sum. Oh, and seize the day and don’t put off for another day.
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