How to Lower Your Life Insurance Premiums


 How to Lower Your Life Insurance Premiums

Insurance types and benefits that are common to many people buying life insurance, such as term life and whole life policies.

Are you looking for ways to lower your life insurance premiums? It's not difficult when you know the ins and outs of how the process works. In this blog post, we give you advice on how to reduce that bill by knowing all about the different policy types and benefits offered by many insurers. It will also help you get a thorough understanding of what factors affect whether or not your quote will go up or down.

Learn about life insurance: type of cover, complementary policies and ways to pay

When you take out a life insurance policy, you're entering into a contract with your insurer. More importantly though, you're entrusting them with your family's financial security if something were to happen to you. In return for this confidence, they offer their own assurances in the form of types of cover and benefits. There are many different options available, so it's important that you approach the subject armed with knowledge before you make your decision.

As well as knowing how much cover should cost, it's also helpful to understand what factors determine whether the price goes up or down (how much they'll cost in general). These factors include the type of cover you choose and what benefits (complementary policies) you also take out with the same insurer.

Let's start by looking at your options when it comes to life insurance, which can be split into two categories: term and whole life.

Term Life Insurance Policy Definition

A term life insurance policy is designed to provide a lump sum payout in the event of death, usually to your loved ones. The payout amount is calculated based on the age you nominate when you first take out a policy as well as your existing health and lifestyle. To receive payment, however, you must die within that policy's term. If you're a non-smoker and maintain a healthy diet and lifestyle, your premiums will be lower than that of a smoker.

Term life insurance typically comes in two different formats: level term or decreasing term. The former is cheaper (and sometimes only available to those below a certain age), but the latter has the benefit of seeing your premiums decrease every year if you maintain a healthy lifestyle.

Whole Life Insurance Policy Definition

Whole life insurance is designed to provide permanent cover for you throughout your lifetime, with no expiry date. Whilst it's not as flexible as term life insurance, it can still be used to provide financial support if something were to happen to you. If you do die, the policyholder(s) will receive a cash sum. However, it doesn't just provide protection for your family. Whole life insurance can be used to cover costs such as funeral expenses or debts (mortgage, credit cards etc).

Whole life can be split into the following policy types:

Guaranteed Life: This is the standard form of whole life insurance that provides a regular payout regardless of how long you live for. The downside of guaranteed life is that it's more expensive than other forms of whole life because there are no guarantees when it comes to how long you'll live for or what state your health will be in when the policy ends.

Annuity: This type of whole life insurance provides a regular, ongoing payout that you can choose the length of – either for a set period (such as 20 years) or for your entire life.

Deferred Annuity: Here, you choose the funding amount at the start of the policy and it's made available to you on an annuity basis over a defined term. Your money will be invested on your behalf and the return then paid back to you as annuity payments in arrears. You can increase or decrease these payments by changing them quarterly or monthly, depending on how much you want to pay in each quarter. Deferred annuities are available in single premium, level premium or flexible premium format.

Whole Life Insurance Benefits

To help you lower your premiums, some insurers offer complementary policies as part of a whole life insurance policy. These include:

Accidental Death Cover: If you die by accident, your beneficiaries will receive a payout. This may apply to partial or full death benefits and is usually included in all whole life insurance policies. The amount of Accidental Death Cover included will depend on the insurer and is usually stated in the policy's terms and conditions. It can also be added to the policy at a later date if this is not included initially.

Critical Illness Cover: If you are diagnosed with a terminal illness, your insurer may pay all or part of the costs of treatments and care associated with the illness. This generally applies only to terminal illnesses which have an expected life expectancy of less than one year. Your policy's conditions should specify if this type of cover is included and how much will be paid for each condition.

Return Of Premium: If your premiums go up and you're not able to pay them, your insurer may return the difference (plus interest) to you at a later date. It's important that you understand this when deciding whether or not it's worth increasing your premium (and how much it could cost).

Payment Life Of Your Choice: Some insurers will allow you to select the date that your policy ends and how your beneficiaries are paid out. This gives you a lot of flexibility if you're the kind of person who wants to leave a legacy or pay for your grandchildren's education.

Lifetime Increase: If premiums increase in line with inflation, this type of cover will see them rise at a slower rate than normal. The idea is to keep premiums affordable as you get older and your health declines. It's not guaranteed that premiums will go down or stay the same, but it's something that can be negotiated with an insurer if you choose this option.

Guaranteed Increase: In certain circumstances, an insurer may offer you this option which guarantees that your premiums will go up by the same amount each year in line with inflation. However it's not a guarantee, as policies do change and factors such as health and lifestyle can vary at different times. It's also worth noting that guaranteed increases may be very expensive for you if inflation is low.

Payment Protection: If you retire or choose to switch jobs, some insurers will pay a lump sum to you (or your dependants) if you lose your job and become unemployed due to sickness or injury or state that there has been a reduction in income.

Discounts: If you're a non-smoker, your premium may go down. As well as the lower premiums, some policies may also offer additional discounts. These are usually for people over 55 or under 18 (depending on the insurer).

Conservatism: On a whole life policy, your insurer will pay out all of the premiums and then stop paying any further interest or bonuses. As you get older and your premium increases, this provides a regular income stream that can be paid into a separate account in order to provide money for things such as children's education or retirement.


Whole life insurance is an ideal way to protect yourself, your family and your other financial commitments throughout your lifetime. This type of life insurance goes beyond the level of protection that term life offers by providing regular income and protection from a variety of causes of death. If you want to discuss whole life insurance with the experts, get in touch with us today. We offer a free consultation and our expert advisers are always happy to help you find the right policy for your needs.

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