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Best Life Insurance

Are you among the millions of Brits who have no life insurance? Although UK consumers overwhelmingly support the importance of life insurance, somehow many of them never get around to actually purchasing life insurance. Recent research from Bright Grey found that although 74% of UK adults purchase home insurance and 61% buy travel insurance, only 53% buy life insurance. (Nations Finance)

If you have decided it is time to purchase life insurance, you want to ensure that you choose the best policy for your needs and situation.

What is the best life insurance?

There is no one life insurance that is best for everyone. Deciding what type and amount of life insurance is best for you depends upon your individual circumstances. Some of the factors you will need to consider when comparing insurance include:

Who depends upon you financially?

Do you have a spouse and children who depend upon your income for living expenses? Will your children need funds for a college education? Do you have other family members such as elderly parents that you help support? Roger Edwards, product director at Bright Grey says “…life insurance is key when it comes to planning properly for the future. It protects your dependents if you die and they lose your income.” (Nations Finance)

What can your budget afford?

If you are on a fairly tight budget or live day-to-day, as many people do, you will probably want to consider the most reasonable form of life insurance, which is term insurance. This can be had for as little as ₤8 a month (based on a 35-year old male non-smoker for a ₤100,000 20-yr Life Insurance term policy). (Moneyfacts) There are different types of term insurance, so you will need to do a little research or talk to a financial advisor.

How much life insurance is best for you?

The amount of life insurance you will need depends upon your income, any savings or other income your family will have should you die and your debts. Some experts recommend up to 20x your annual salary, but most advise consulting a financial advisor for specific needs. Remember you will need to allow enough money to cover funeral expenses, any debts you may leave and ongoing living expenses for your family.

Don’t buy more life insurance than you need. Research shows that 20% of people buying expensive whole-life policies lose them within 2 years, through being unable to make payments. (Life Insurance Advice)

How do you find the best life insurance?

Once you know what you need, the most important thing you can do in choosing a life insurance policy is to become informed about the choices available. There are numerous helpful websites such as MoneyFacts, MoneyExtra and the government site Money Made Clear. These websites explain different types of life insurance and the benefits of each. You can also compare life insurance prices online through comparison websites. Or you could consult a financial advisor.

How do you know which life insurance company is best?

The UK has a very competitive insurance industry, with the life insurance market being the largest in Europe and 3rd largest worldwide. (Life Insurance) With hundreds of companies to choose from, it can be difficult to settle on the right one. It is generally a good idea to check into an insurance company you are considering. As all UK insurance companies are regulated by the Financial Services Authority, you can check that the company is registered with the FSA.

You can visit individual company websites or check with comparison sites such as Life-Saver which also provides a brief description of many top UK companies.. Their listings generally include items such as how long the company has been in business and the A.M. Best rating for financial strength. The higher the rating the more financially stable they are and the more likely to have the money to pay off claims.

Is the cheapest life insurance the best choice?

Price is only one of the factors that you should look at in choosing life insurance. You also need to consider the terms and limitations of the policy, as not all policies are the same. Be sure to read all the fine print and that you understand all the details.

A recent report from Lifesearch found that many UK consumers are confused by the terminology and complexity of life insurance. Linda Tyson, Lifesearch policy advisor notes “The financial and emotional consequences of making a mistake in protection products are higher than most, if not all, other areas of financial services.” (My Finances)

By all means, find the cheapest life insurance that meets your needs. Then compare it to other policies and see if it offers the same coverage.

Always compare before purchasing a life insurance policy. The competition in the UK insurance industry offers opportunities for virtually everyone to find life insurance that will fit their needs and be the best life insurance for them.