Eight top tips to save money on your life insurance

The must-read guide for existing policyholders or first-time buyers.

Since the EU Gender Directive came in to force at the end of last year, insurers have been forced to change the way they price their policies as they are no longer able to take account whether you are a man or a woman when deciding on the price to charge.
According to the financial advisers at Money-minder.com, if you are about to arrange a mortgage your lender will love it if you also arrange your life insurance through them.
But doing so could be a costly mistake. The firm found that a mortgage lender could charge 50% more for mortgage protection life assurance than the best premium found by running a comparison.
Here are a few tips to help save you money on your life cover:
1 - Premiums can vary between insurers by as much as 20% for the same cover - so compare!
For example, a 30 year old non-smoker looking for level term life cover of £200,000 for 25 years without needing advice could find premiums from as little as £8.00 per month with a one-off £25.00 application fee ranging up to £9.84 per month for the same cover from a different insurer. A £1.84 per month difference may not sound like much but over 25 years that amounts to £552.00 which no doubt you'd rather have in your pocket than give to an insurer!
The saving for smokers can be even greater - How does £1000 sound?
For example, if the same 30 year old was a smoker they would be quoted premiums from £13.27pm with a one-off £25.00 application fee ranging up to £16.66pm. The £3.39pm difference over £25 years would amount to a saving of £1017!
2 - On the subject of smoking, giving up the dreaded weed might not only save you a packet (or more!) on cigarettes you can also benefit from substantial savings on your life insurance too.
Using the examples above you'll notice that the lowest premium for the non-smoker was £8.00pm with a £25 application fee and the lowest premium for the smoker was £13.27pm with a £25 application fee. All the other factors were exactly the same it was just that one smoked and one didn't. The £5.27pm difference amounts to a saving of £1581 over 25 years which is another very good reason for giving up.

Warning for women as millions still under-insured

Women are under-insuring themselves and failing to safeguard their families’ financial futures, according to a new report.

Despite a small increase in the general numbers getting personal insurance in the past year, women are still insuring themselves for less than men, with women in their 30s typically insuring themselves for nearly a third less than men in the same age bracket, according to the study by Scottish Provident.
This gap gets progressively wider with age and becomes a significant gulf for those in their 60s, when men have three times as much cover in place.
Jennifer Gilchrist, senior product development manager at Scottish Provident, said: "In 2012 at most ages we saw a healthy increase in the average sum assured for both men and women compared to 2011.
"However, it is disappointing that in all but the 60s age range the gulf between men and women has continued to widen.
"This is especially so when so much effort was put into marketing towards women prior to the implementation of the EU gender directive.
"It is important that both men and women look to protect their families' futures by making sure they take out sufficient cover to look after them.
"We may have succeeded in persuading more women to take out life assurance than before but these figures show they still don't have enough. We need to consider how we reinforce these messages so that women truly understand their financial worth."
The EU gender directive came into force in December 2012 and made it unlawful for insurers to base insurance policies and their costs based on a person's gender.

Queen's Speech: what do the changes mean for you?

We explain how today’s announcements on pensions and social care could affect you and your family.

It was confirmed today in the Queen's speech that the Government will introduce a Pensions Bill which will create a simple, flat rate pension that encourages saving and helps women who have had long career breaks.
The Bill is a landmark piece of legislation and is set out to overhaul the whole pensions system. The Bill will introduce a single tier pension scheme in a bid to encourage saving, and will also increase the state pension age to 67 by 2026.
The new state pension, set to come into force in April 2016, will be based purely on an individual's National Insurance contributions (NI); no one else's contributions will be taken into account.
It will be worth up to £144 a week, but to qualify for the full sum the retiree will need to have worked and made NI contributions for at least 35 years.
Anyone who does not have enough NI contributions of their own will no longer qualify for a state pension.
The Bill will also will end the concept of a second state pension - which allows people to opt out of some National Insurance contributions and pay more money into a private scheme.
The Pensions Bill is designed to introduce reforms which will "make it clearer to people what they will get from the state when they retire, reduce means-testing and provide a firmer foundation for saving."
Also announeced today was a Bill which will provide assistance and financial support for carers who have to take out time from their work to look after elderly or sick friends or family.
The Government has set out £150m to cover the cost of assistance for carers.
Stephen Lowe director at retirement income specialist, Just Retirement, said he thought the inclusion of new social care legislation was symbolic of changing priorities:
"Care needs affect many, many people in the UK and those involved in the sector will be pleased to see the Government putting its weight behind major reforms to the system of adult social care.
"As the number of elderly people increases, it is vital they understand how the system works and the potential impact that care needs can have on their lives, their families and their finances.
"It is up to the Government and us in the financial sector to work together to ensure that people have access to products that can help protect against unexpected changes in their circumstances, and also access to professional advice so that people can understand their options and make intelligent choices."
The Bill will also introduce a new system of social care funding from 2017.
This will mean that the public purse will pick up the care bill after someone has spent £75,000 of their own money for their care needs. The cap amount is not finalised and can be anywhere between £72,000 and £75,000. However according to the National Pensioners Convention, this Bill is set to only affect 1 in 10 people.

Tax breaks could give 'protection incentive'

More than 70% of financial advisers believe tax breaks could provide an incentive for take up of financial protection, according to a survey published today.

The survey, conducted by Zurich, looks at the barriers to people taking out adequate protection, and explores adviser views on measures that could help raise awareness of its importance.
The most common reason advisers give for their customers not buying protection is that they believe they already have some form of cover in place via their employer (65%).
Other key reasons for failing to buy protection include an ‘it won't happen to me attitude' (59%); a reluctance to consider unpleasant life events such as unemployment, illness or death (57%); cost (52%); and the belief that the state will pay (39%).
The majority of advisers also support running an awareness-raising campaign to highlight the realities of having little or no protection in place.
Just over half believe this should be government-led (52%), while 46% think that an organisation such as the Money Advice Service would be better placed to take the lead.
Head of retail propositions, Zurich UK Life, Peter Hamilton, said: "We are collectively underinsured across the UK against the risks that could have a real impact on our lives and those of our families.
"We insure our phones, our pets our cars and our TVs but too often not our ability to continue to provide financial support for those that matter to us.
"We believe that just as there are tax breaks for saving in a pension or an ISA, the government could introduce more tax advantages to people to encourage them to take responsibility for their financial security."

Personal insurance: what you need and when you need it

Buying a house, having a child or retiring? Make sure you have the right cover.

As you pop open the champagne to celebrate the birth of your child or the start of your retirement, insurance is unlikely to be front of mind. However, life-changing events are typically the time when you need protection more than ever.
The number of products on the market can be overwhelming, leaving some people confused about what cover they actually need - and what they don't.
We asked protection experts to unravel the personal insurance minefield.
'I'm buying a house with my partner'
If you're taking the plunge and buying a property with your partner, there are two main priorities from an insurance point of view: making sure the mortgage debt is cleared in the event one of you dies and being able to continue mortgage payments if either of you can't work due to long-term illness.

The debt only needs to be paid once so a joint life insurance policy tailored to the level of the mortgage and decreasing in line with the debt will be needed for the life cover. "This will be surprisingly cheap," says Peter Chadborn, director and adviser at Plan Money.
Another option is to buy two single life plans. With a joint policy, you and a partner are covered by the same plan. If you take out two single policies, they are completely separate plans meaning you can get double the cover. You can also be insured for different amounts.
Roy McLoughlin of Master Adviser says purchasing two separate policies has its benefits: "It's very difficult to break up a joint life plan if you and your partner separate. In these circumstances a lot of people just end up cancelling it."
Income protection is also a good idea for homebuyers in order to protect mortgage repayments. If your employer provides sick pay, this might not be a requirement. However, if they don't, the level of cover should be for at least your proportion of the mortgage payment and run for at least the term of the mortgage, Chadborn suggests.
Houseperson cover could also be worth considering. This is a type of income protection that covers housewives, househusbands, people who have been unemployed for at least 3 months and students.
'I'm getting married'
Unless you are buying a place together for the first time - in which case the points above are all relevant - your financial dependence upon each other is unlikely to have changed.
However, if budget permits, Chadborn suggests considering critical illness cover. This insurance provides a ‘financial cushion' should you be diagnosed with a serious illness which may not prevent you from returning to work. You may not die from it but you may want to adjust your lifestyle or not have to work so hard. The lump sum pay out from a critical illness policy will effectively buy you lifestyle choices.

BLOG: Protection - don't bury your head in the sand

Life cover should be high up on the list of priorities for homebuyers, writes Ian McGrail.

No one likes to think about it, but there is something very reassuring about knowing that if the worst were to happen, your loved ones would be financially secure. This peace of mind comes at a relatively small cost but remains overlooked by the majority of people.
A recent study conducted by the MoneyGroup reveals just 37% of Brits have life insurance, while only 9% have critical illness cover. Unfortunately these figures come as little surprise to us and further highlight the need for people living in the UK to stop burying their heads in the sand when it comes to life and critical illness cover.
As a mortgage broker specialising in helping first time buyers take that all important step onto the property ladder, I cannot stress the importance of financial protection enough. Quite simply, life insurance is designed to let people provide for themselves and their loved ones financially when they die.
Life insurance therefore removes all worries about getting in to debt, having to return to renting or even becoming homeless. Worrying about money is the last thing you need when the worst happens, so we are calling on homeowners to sit up and take notice before it's too late. For just £10 a month you can afford around £150,000 of cover, which seems a small price to pay for your financial security.
There is a lot to consider when buying a home; yet life and critical illness cover isn't exactly the happiest subject to think about. However, it is undoubtedly one of the most crucial items to tick off the list as you prepare to make one of the biggest financial decisions of your life. So, take our advice - take cover!

Men in 30s buy into protection with increased cover levels

Men in their 30s have increased the amount they insure themselves by a fifth (20%) in the past year, according to new figures from Scottish Provident.

Women are also shown to have increased the amount they typically insure themselves for, but it is the men in their 30s that are leading the way.
For men in their 40s and 60s levels of cover are now shown to be equalling the women, as this figure has increased by 10% in the past year; it would appear that only those in their 50s are bucking this trend, men increasing by just 6%, with the amount women in this age group value themselves at seeing a fall of 8%.
Scottish Provident head of product development Ian Smart said: "We have seen a trend over the past year with both men and women increasing the level of cover they have in place, particularly at the younger end of the age spectrum."
"This is the age at which many people purchase their own home and start a family. It is therefore only natural that they will also consider whether they have sufficient financial protection in place to safeguard these major events."

Four million women are main breadwinner at home

Four in 10 women are now the main breadwinner in their household, says a new report, with the average female earning £14,000 more a year than men.

According to insurer LV=, an estimated 4.3 million women are the main breadwinners in their households, all earning substantially more than their male partners.
LV= polled 3,900 women and men aged 25 - 59 about the rise of the female breadwinner over the years.
Where the vast majority (59%) of yesterday's women accepted traditional gender roles, that's certainly not the case for today's power ladies.
The proportion of women in their 20s and 30s that earn demonstrably more than their partners has leaped from 26% to 41% over the last three decades.
The average female breadwinner earns £51,965, while their gents earn just £37,965 - meaning that millions of women are now bringing in up to 37% more per year than their other halves.
Over half of these female breadwinners claimed to have always earned more than their husbands and boyfriends.
One in 10 said they would refuse to ever date a man who earns more than her.
In fact, 40% of households are now reliant on the female breadwinner's income which means that the household would not be able to cope should she stop working.
Mark Jones, LV= head of protection, said: "This research certainly throws up some interesting findings and it's fantastic to see antiquated stereotypes being challenged.
"However, it is worrying that so few have any financial safeguards in place for protecting their lifestyle as it can put them in a precarious position.
"Whether it's the man or the woman that is the higher earner, the responsibility of having others relying on your salary means it's important to consider what would happen if you were unexpectedly unable to work due to illness, accident or unemployment? We would encourage people to ensure they have a backup plan which could offer them financial support, especially if they have children."