As we start another new year it is common to take stock and re-evaluate our lives. Often this takes the form of starting a new diet to lose weight or perhaps a new exercise regime to improve fitness.
It is also a great time to consider our financial wellbeing, especially if you have young children who rely on you. A great way to ensure your loved one’s financial future is to secure life insurance protection.
Life insurance is simply a financial safety net for a worst-case scenario. If we were no longer around to provide, a pay out from a life insurance policy could provide invaluable funds. The proceeds are usually used to cover mortgage repayments, meet rising living costs, leave an inheritance and fund funeral expenses.
However, at this present time when so many families are seeing their disposable income squeezed by a crippling cost of living crisis, paying a monthly life insurance premium may seem impossible.
But did you know that you can reduce the cost of you monthly premiums by embracing a healthier lifestyle?
We asked leading life insurance broker reassured.co.uk to run through the key considerations which could help lower the cost of your cover.
- Lose weight
Insurers calculate the cost of premiums based on the level of risk you pose (or put another way the likelihood of a claim).
During the application process you will be asked about your height, weight, and BMI so the insurer can gage the risk you pose.
Because obesity is so closely linked to several medical conditions being overweight will inflate your monthly premiums. However, if you embrace a new year’s regime and are able to lose weight this will help lower the price of cover.
It’s a ‘win – win’; you become healthier and happier, so does your bank balance.
2. Alcohol consumption
We all know the damage alcohol can have on our health but depending on your consumption it could also have a significant impact on our life insurance premiums too.
As with your weight, insurers will ask you how much alcohol you drink during an average day/week. A high alcohol consumption or an alcohol dependency will naturally increase your premiums as statistically a claim is more likely.
In fact, a high alcohol intake often goes hand in hand with being overweight due to the high calories included in many alcoholic drinks.
The Christmas period is often a time when we indulge and drink too much, before reducing our intake in the new year with the best intentions to improve our health.
Why not take this new year’s resolution and make a longer-term life change to lower your premiums.
3. Quit smoking
Along with your age, your smoking status is one of the most influential factors on the price that you pay due to the medical conditions associated with the habit.
What’s more this impact accelerates as we age, so whilst a 25-year-old smoker may pay 25% more than a non-smoker, a 50-year old smoker could pay over 100% more for their cover.
An insurer will classify you as a smoker if you have smoked or used a nicotine replacement product within the last 12 months. If you have quit smoking in 2023, firstly well done – but please be aware you will need to have given up for a period of time before you can receive the lower premiums that a non-smoker enjoys.
4. Non-disclosure
Whilst we all want to secure our loved one’s financial future at the lowest possible price, it is imperative you are open and honest during the application.
If you lie or withhold any informative during the application process to secure a lower premium, this is known as ‘non-disclosure’.
Non-disclosure is actually a form of insurance fraud and can jeopardise a future pay out, potentially rendering your selfless investment a waste of time.
5. Take time to calculate the level of cover you need
The greater your cover amount (known as the ‘sum assured’) the more your premiums will be. Therefore, it is important to take the time to calculate the level of cover you require.
Consider the cost of your mortgage repayments or rent, household bills, childcare costs, food bills, transport costs. Also consider the age of your children and how long it will likely be before they are financially independent.
In summary
Times are hard for many families at present. However, if budget allows it is essential that we provision for our loved one’s future. Life insurance is a cost-effective way of achieving this.
We hope this article has provided some practice steps we can all take to help lower the cost of life insurance, whilst at the same time improving our own wellbeing.
Even a saving of a few pence each month over the course of a 25, 30 or even 35-year policy term could add up to a significant sum. Why not sure your journey to a healthier you today.
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