Making life insurance more affordable for parents

The average cost of raising a single child in the UK is estimated to be £231,843 over the course of the first 21 years.

Factor in all of the other daily outgoings we incur and it is no wonder most parents consider themselves unable to afford life insurance.

Now give some thought to what might happen to your dependants if you or your partner were no longer around.

(I know this is a truly horrible situation to consider and that is probably why over half of parents don’t have any life cover).

How would you cover the cost of raising your family, maintain their standard of living and continue to pay your mortgage repayments?

Life insurance from around 20p-a-day can provide a reassuring safety net to cover all these expenses if the worst were to happen.

Life cover is probably much cheaper than you think

The good news is that life insurance is probably much more affordable than you think.

What’s more, there are actually a number of ways you can help keep the cost of your premiums to a minimum.

Here are our top 5 tips for making life insurance more affordable…

1) Don’t take out more cover than you need

When taking out life insurance it can be tempting to opt for the highest level of cover possible. The issue being, the more cover you take out, the higher your monthly premiums.

The amount of cover you need depends on what it is you are looking to protect. Think about how much is left on your mortgage, how long until your children are financially independent and your daily living costs.

To ensure you are not paying for more cover than you need, work out exactly what it is you are looking to protect and select your payout amount accordingly.

The length of the cover term also an effect on the price of your policy. The longer the term, the more likely a claim and thus the higher the premium.

It is common for a policy term to mirror that of your mortgage term or last until the children have left home.

2) Take out cover as young as possible

Life insurance cover for a 25-year-old can cost as little as £6 a month. This is simply because statistically, the insurer is far less likely to have to pay out during the term of the policy.

Therefore, the younger you are when you take out cover, the cheaper your monthly premiums are likely to be. Why not take out cover in your 20s or early 30s and lock in those low long-term premiums?

It can be tempting to avoid taking out life insurance at a younger age due to good health and a long life expectancy, but putting it off could end up costing you more in the long run.

3) Consider a joint policy

Paying for one joint life insurance monthly premium, generally speaking, is significantly cheaper than paying for two single policies.

If you are in a relationship and looking to provide support for one another, taking out a joint life cover policy could save you money each month.

However, it is worth noting that joint life insurance will only ever offer one payout, usually upon the first death. Therefore, depending on what it is you are looking to protect a single payout may not be sufficient.

4) Live a healthy lifestyle

Premiums are calculated taking into account a number of personal factors including your BMI, medical well-being, alcohol consumption and smoking status.

Whilst certain medical ailments cannot be avoided, you can control your weight, how much you drink and whether you smoke.

Improving your lifestyle can help keep premiums low.

5) Avoid dangerous activities

Admittedly, walking down the street can be dangerous enough, but there are certain activities which are considered a higher risk than an outing to the local shop.

Partaking in an activity deemed high-risk, including motorsport, skydiving or horse riding, can increase your monthly premium.

The increased risk of death associated with these sports is mitigated through the insurer by charging you more.

In summary

As you can see, there are a number of things you can control to make life insurance more affordable, whilst securing the financial future of your family.

Once you have taken on board all of our above tips, the best way to secure the cheapest possible premium is to compare multiple quotes.

You can invest time yourself researching different quotes online or use a comparison website. However, the research takes time and comparison sites rarely compare all the main insurers.

An alternative is to use an FCA registered broker, saving you time and money by doing the hard work for you.