Clear planning for life insurance
Life insurance is specifically designed to protect the most important things in your life which are your family and your home.
A proper clear plan when buying life insurance can help you to save time and energy when you come to taking out a policy. In this guide, we look specifically at clear planning life insurance to make your whole experience easier and save you money hopefully.
Most life insurance policies are designed for a very specific purpose, so having that in your mind when buying cover will definitely help. If you know what you want to protect and ideally have a budget in mind, then the process will be easier.
Here we have a few of our MPO top tips for clear planning life insurance.
What do I need to think about before buying life insurance?
Getting your ducks in a row before you think about buying life insurance can help to save time and money in the long run.
Some of the things that you’ll need to think about before you take out life insurance:
What do you want life cover for?
If you’re covering your children then how old are they and how much cover would you like to give them (e.g. £100,000 each). You should also think about what age you would like to protect them until (e.g. age 21).
One of the biggest reasons for cancellation of life insurance is because it’s no longer affordable. In this case, it is still required but the circumstances have changed and it’s too expensive to keep it going. If you cancel life insurance then you’ll lose the terms and rates that you’ve got so it is likely to be much more expensive to replace.
What type of life insurance do you need?
There are several different types of life insurance and they all offer cover for specific things, so think about what you want to protect. Some of the main types of cover will protect your family, home, business or income.
Have you got any pre-existing medical conditions?
Which type of life insurance is best for me?
When you’re looking at clear planning for life insurance, it’s useful to know what types of cover are available and what your options are.
Common life insurance options:
- Family life insurance (level term life insurance): protects your family against financial loss and uncertainty if you die
- Mortgage life insurance (decreasing term life insurance): cover to pay off your remaining mortgage balance if you die (repayment mortgages only)
- Whole of life insurance: designed to provide guaranteed protection for your family and to be used for Inheritance Tax planning
- Family income benefit: replaces your income for a term to pay out to your family if you die and your income stops
- Relevant life insurance: tax efficient business life insurance for business owners and key staff / personnel
- Critical illness insurance: pays out a lump sum if you’re diagnosed with a serious or critical illness (can also be referred to as critical illness cover)
- Income protection: while it doesn’t sound like life insurance, this is actually classed as a type of life insurance because it protects your lifestyle if you’re ill or injured (will usually pay out each month for 12 months or 24 months, if you can’t work due to sickness/injury)
What if I already have life insurance?
It is good that you already have the common sense to put something in place already to protect your family, but you should regularly review any insurance, especially something as important as life insurance.
Life insurance pays out a cash lump sum that could be vital financial support for your loved ones. This payout can be used to cover things such as funeral expenses, mortgage payments and more.
You might want to review your cover because of a change in your circumstances that needs to be protected (e.g. new-born, moving home, new job, marriage, divorce etc.). Getting the right cover can make a big difference to your loved ones if anything happens to you and so regularly reviewing your cover is always sensible.
It is possible that you might even be able to save money on your life insurance, but cover does get more expensive as you get older, so this might be unlikely.
Where is best to buy life insurance?
There are lots of options for you to get instant life insurance online or to get free advice about life cover, if you need a bit more help.
We recommend that you should speak to a life insurance expert to make sure that you get the best cover at the right price. Most life insurance specialists don’t even charge a fee for setting up your cover and will often be even cheaper than buying cover online or direct from an insurer.
What if I have a pre-existing medical condition?
With a pre-existing medical condition, clear planning for life insurance can be even more important and so can getting proper advice.
When you’re thinking about getting life insurance with a pre-existing condition, you should prepare yourself by gathering as much information as you can beforehand. Most insurers will ask questions related to your medical history, particularly if you have serious or chronic conditions.
- Dates (e.g. diagnosis, treatment, surgery, hospitalisation etc.)
- Medications (e.g. names, dosage etc.)
- Details (e.g. type of conditions, stage or grade, levels or readings etc.)
Clear planning for life insurance with a pre-existing medical condition can help you to save time, money and stress. You should also speak to a pre-existing medical conditions life insurance expert to get proper advice and assistance with comparing multiple life insurance quotes and policies.