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Although most life insurance policies will generally do ‘what it says on the tin’ they are not always exactly the same - there may be differences in the terms and conditions between policies. So, it is important to find a policy that suits you and your lifestyle to make sure that you get the right deal. Let’s take a look at 10 tips that may help you out:
1. Fixed premiums
Some life insurance policies will be paid by a fixed rate premium (i.e. you pay the same amount every month for the term that the policy lasts) whilst others may have variable charges. Although variable charge policies may be cheaper to start with they can be reviewed regularly and premium costs can rise so you could end up paying a lot more.
2. Conversion options
Life policies that give you conversion options basically guarantee that you can have a new
online life insurance policy when your existing one runs out without having to take your health into the equation. Although this may not seem like a big deal at the moment it may be an issue down the line - it can be hard to get accepted for standard life policies when you reach ‘a certain age’, especially if you have health problems!
You can find more information about how to buy
life insurance on the insurance guide page of the site..
3. Inflation options
In most cases you’ll take out standard life insurance policies to pay out a fixed sum.
This sum may seem a lot when you take the policy out but it will actually decrease in ‘real’ value over time due to the effects of inflation.
Some policies will increase your payout to keep pace with inflation so the money your family would get 20 years down the line would be worth more or less what it is now.
4. Lifestyle clauses
Some life insurance policies won’t pay out if you die due to specific activities. So, if you are into extreme sports then it’s a good thing to have a policy that covers this!
5. Multiple insurance
If you are insuring two people at the same time then your policy may either be a joint or dual life option.
A dual life option may be more cost effective in the long run as it will pay out for the deaths of both people who are insured.
A joint life policy will pay out on the first death but then the policy will stop and the other person will need a new policy. Given that they may be older when this happens their premium costs
for a new online life insurance policy could be a lot higher.
6. Flexibility
UK Life insurance policies are set up to last for a long time so it’s wise to have a policy that will allow you to make changes as you go through life.
7. Extra cover
Many insurers will throw in free terminal illness cover into their life insurance.
8. Payment options
Most online life insurance policies will have monthly premiums but some will offer you the option of paying a lump sum annually. This could, in certain cases, reduce the costs of your overall annual payments.
9. Policy in trust help
If you put your life insurance policy in trust then you can specify who it is paid to which will make the actual payment process a lot quicker (otherwise it just ends up going to your general estate). Look for policies that come with a trust form so you can remember to do this!
Click here for types
of life insurance.
10. Waiver of premium
Life insurance policies that give you a Waiver of Premium option will basically help you out if you cannot work due to illness. You pay extra for this option but it means that the insurer will waive your duty to make payments under the terms of your policy which could be useful.
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