Some tips on buying term life insurance

·         Research the market to find out what is available. A good way to do this is on line as some insurers offer special rates over the internet. You do not have to do all the work yourself. Many web sites such as protected.co.uk offer to search over 100 plans from the UK’s tops brands.

·         The premiums for term life insurance are usually banded by age. So the younger you are when you take out the insurance the lower the premium will be.  Putting off the decision to purchase term life cover could mean you will end up paying a higher premium.

·         You will need to decide how much cover you want to purchase. You should set yourself a premium budget to work from as well as trying to see what lump sum amount would be essential to provide a reasonable level of protection.

·         When you fill in any insurance application or proposal form always tell the truth. This is the basic information which will determine whether or not the insurer will want to offer you insurance. If it is found out at a later date that you provide incorrect information then the insurer may be allowed to void the insurance policy.

·         Life style choices which help to keep you healthy are also likely to result in lower life insurance premiums. Correct body weight, non smoking, fit and healthy with low alcohol intake all help you to get into the low premium bracket for your age. 

·         Insurers usually incur some costs in acquiring your business and in issuing the policy documentation.  Because of this some insurers will increase the rate on policies with a low sum insured and reduce the rate slightly for a larger sum insured. So if you can see the need to have more life cover in the future then you might want to consider taking the cover out now as a single larger policy sum insured.

·         Even if you already have life cover you should always check that the cover you have is suitable for your present needs. Life can bring with it several changes and what might have been a reasonable level of cover a few years ago may not now match your existing arrangements. For example you may have higher life style commitments, an addition to the family, higher mortgage or debts.

·         Consider whether you have life insurance through other sources such as life insurance cover tied to your employment or to a mortgage.

·         Do you want the life cover just to be based on your death or to also include the death of your partner (referred to as a joint life policy).

·         Do you want the sum insured to remain level throughout the term of the policy or do you wish the sum insured to reduce in line with the outstanding balance on a repayment mortgage.

·         Do you want the policy paid to your remaining estate, a specific beneficiary or written in trust? Some of these considerations may have tax implications and you are advised to seek financial advice if you are in doubt.