How to Save Money on Your Protection Insurance
If you have loved ones and you want to ensure that they are protected in the event of your death, then you need to consider taking out life cover. The good news is that life insurance has recently reduced in price.
The majority of us like to feel that we are getting the best possible deal when spending our hard earned cash. Please see below for a few handy tips on how to make your money go further.
The money saving tips:
1) Review your plan frequently. It is always a good idea to regularly review your life cover. I am sure like most people you have a mobile phone and I guarantee you are not still using the first mobile phone you ever owned. Many people review their mobile phone contracts for extra benefits and the latest mobile technology. Why would you not want to do the same with your life insurance? Ask yourself this question, since taking out your first life insurance plan, how many of these things have happened to you? Have you moved house, re-mortgaged your home, got married, had a child, got a job promotion, received a pay rise or taken out a new loan. If even one of these applies to you, then there is a very good chance that your life cover is no longer suitable for you.
2) Do not take out more life cover than you need. If you need life cover to protect your mortgage repayments then a decreasing plan may be the best option for you, rather than taking out a level term plan. If you have death in service or an existing plan already (possibly through your employment) then you can use these to reduce the sum assured and therefore the cost. Many people have old endowment plans which could be used against your life plan or alongside depending on the term left on your endowment.
3) Adapt or select your critical illness cover to suit your budget. You do not have to have the same amount of critical illness cover as your life insurance, you can choose the amount of life cover and critical illness cover to suit your circumstances and budget, for example, you can take out £100,000 of life cover for a term of your choice and one year’s salary worth of critical illness cover for example £20,000. This can bring the cost down significantly.
4) Look at a budget income protection plan rather than a fully inclusive income protection policy. Many insurers providing income protection plans have a budget plan option. The budget income protection plans can cover you until retirement however the plan will only pay out for a maximum of two years per claim. This gives you peace of mind knowing your protection plan can cover you until retirement and gives you a chance to sort your finances out if you are ever off of work long term.
5) There is an option to save money on your policy with some insurers by paying annually rather than monthly as with some insurance companies they will offer you a small discount to pay a year upfront.
What if I need to make Changes to the Plan?
There are usually two types of changes people wish to make to their insurance plans during the term of their plan. The plan may have become unaffordable or your circumstances and requirements are now different to when you originally took the plan out, for example, you may require more cover than you had previously needed. If and when this happens it is advisable to speak to your Proadvice financial adviser. Your Proadvice financial adviser can guide you on the best way to change or adapt your insurance plan and may even be able to offer you a solution that you had not thought about.
Changing your Personal Details
Changing your personal details with your insurer is easy to do and extremely important. If you forget to tell your insurance provider you could find yourself with a plan being cancelled in error.
One thing people often forget to do is to tell their insurance company when they change banks. If your insurance company cannot collect your premiums because you have forgotten to advise them that you have changed your bank details, then your plan may be suspended and even cancelled. Your insurer will write to you to let you know that they have been unable to collect your premium but if you were to accidently throw the letter away, possibly even thinking it was junk mail, then before you know it you are in a situation without insurance. If you were to move house as well as change your bank and you failed to advise your insurer and they try to contact you by post you may not find out until it is too late. It is absolutely essential that you keep your insurance company up to date with your contact details and address just in case they should ever need to inform you of changes to your plan, updates during underwriting or even that you have missed your last direct debit.
The good news is with these changes they can usually be done by your Proadvice adviser on your behalf with a simple phone call to the insurance company. By keeping your Proadvice adviser up to date, they will also be able to keep you in the loop with all the latest insurance news.
There are a number of other life events that may be worth speaking to your insurance company about if they happen during the term of your insurance plan. Getting married, moving house, having a child and getting a promotion at work are all celebratory events but with these you may need to increase your life cover. Increasing you life cover can often be done with no need for further underwriting. If you plan has guaranteed insurability built in, (guaranteed insurability allows you to increase your level of cover under certain circumstances, without disclosing any further information), the insurance company can increase your cover by up to 50%.
Guaranteed insurability can keep your plan up to date and in line with your current life. Guaranteed insurability is a free benefit added to life plans but unfortunately not everyone can qualify for the benefit so speak to your Proadvice Adviser today to find out more.
If you have recently married and changed your name it would be wise to update your insurance company as soon as possible. Your aim is that should the need for you to claim arise you want to make your claim process as uncomplicated as possible; one way to do this is to ensure that your insurance provider know the correct and up to date name of the life assured.