Do cheap life insurance premiums offer value?
Not many people can argue against saving money, particularly in today's economic climate where inflation is slowly increasing the cost of daily living.
However there is a remarkable difference between buying the cheapest life insurance policy on the market regardless of what the policy contains, and saving money on a policy when comparing like with like.
However having said that, below are some things to consider if you would like to lower your rates and get cheaper life insurance premiums.
Features that can help make your premiums cheaper
- Pay yearly - many insurers will not charge you a frequency loading on your premium if you pay yearly
- Fully underwritten policy - this type of policy is catered to your specific needs and risks by asking many questions which will generally result in a significantly lower premium.
- Buying couples insurance - most insurers offer multi policy discounts for couples.
- Free built-in benefits - while this point technically doesn't help lower your premiums, it can offer more value for money. Look for benefits like funeral advancement, loyalty benefit, accidental injury benefits and free children's insurance.
- Healthy BMI - A Body Mass Index between 18.5 to 30 kg/m2 can help ensure a loading is not placed on your policy, which may increase your premium.
- Quit smoking - a non-smoker has much lower life insurance rates compared to a smoker.
Compare apples vs apples
Most insurers, advisers, and online comparison websites will quote monthly premium costs, or sometimes yearly premium costs.
A small handful of online comparators may quote fortnightly premiums costs, rather than monthly, so be aware of this when making life insurance comparisons.
Remember: cheaper is not always better!
While you may be able to find cheaper life insurance premiums just remember that cheaper is not always better. Some policies have features which would help your situation and the benefit of this may outweigh the dollars you save on a low-cost policy.
So before you make a final decision, just remember that it may be far more beneficial to you and your family to pay for comprehensive cover which offers greater financial protection.
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save up to 20% on your first year's life insurance premium.
June 2011
