If you are looking around at buying a life insurance policy, you
most probably are taking out life insurance for the first time –
some people do switch insurers but it is not common – so we’ll
assume your are new to this - where do you start?
Step 1 – Make sure you clearly understand why you need life
insurance in the first place. It sounds obvious but perhaps you
didn’t come up with the idea yourself – perhaps someone
suggested it might be a good thing.
oDo you have
dependents or close family who need financial protection should
something happen to you?
oDo you have a mortgage that
couldn’t be repaid if you were no longer around?
oAre
there other debts, like business loans for example, that need
covering in the event of your death?
oDecide if you need
the insurance to pay out in the case of a critical illness as
well as in the case of your death?
oKnow approximately
how much cover you are looking for before you start - otherwise
you may get talked into buying more cover that you really need.
oGet the answers to all of these questions before you start
looking.
oRemember – Life Insurance is a highly regulated
industry, monitored by the FSA – so you should either get good
advice or be told clearly that you are not being advised.
Step 2 – Decide on how you are going to go about finding the
best life insurance for yourself. There are one or two routes
you can use.
oUse the internet to research and track down
a policy that suits you.
oContact an insurance broker you
already know or who has been recommended to you.
oIf you
don’t know a broker – approach one of the local firms.
oVisit your bank – they’d love to sell you a life policy but
don’t expect to get the best price – they’re unlikely to
discount.
oOne final option – just call up one of the big
name brands – seems obvious, but again you may not get the best
deal.
Step 3 – How are you going to search for a quote?
oWhichever option you choose, it’s not a five minute job, so set
yourself some time aside.
oEven if you don’t buy through
the internet, we’d recommend starting there to get a rough idea
of prices.
oGather the information you’ll need to
complete an enquiry.
oCover amount, the term (how long do
you want to be covered for) and any illness history about the
lives insured and possibly your parents.
Step 4 – Not
really a step but some useful info about the life industry.
oThe actual life insurance policies you sign up for are provided
by a relatively small number of companies – people like Norwich
Union, Legal and General, Prudential etc.
oBut you’ll
find hundreds of companies offer to sell you a policy – most of
them are brokers and dealing with a broker can be good news.
oIt’s a competitive industry, so most brokers will give you a
discounted premium if you ask. Play one off against another to
get the price down.
Step 5 – unlike car and home
insurance – getting your life policy in place can be more
complicated depending on your personal circumstances. The life
insurance company or broker will give you an initial indication
of price, but there are detailed questionnaires to completed and
if you are older or have some medical history, doctors reports
or even medical examinations may be required. The whole process
can be completed quickly, but sometimes takes a few weeks. Be
prepared.
Step 6 – Always be honest – as with all other types of
insurance, there’s no point in hiding a bit of information in
order to get a cheaper premium – even more so with life
insurance as the value of the claim is likely to be so much
higher. If you are unfortunate enough to have to claim on a
policy, the loss adjusters at the insurance company will
investigate the case very thoroughly before they pay out
potentially tens of thousands of pounds.
About the Author:
Marcus Brooks writes for and recommends the
cheap life insurance website
www.lifenow.co.uk
