Ok so life insurance is as cheerful a subject as watching your premiums go out every month for no apparent benefit.
Twenty years ago life insurance was just something everyone did fully suspecting they would never need the benefit but the years have seen many of our independent financial advisers arrive at a house where the widow/er hung on every word they said in relation to their policy.
We aren't going to try and make it an interesting subject, rather we'll give you some easy tips to make the very best of the money that leaves your bank account.
Instead of buying your life insurance yourself it may well be worth speaking to your employer about setting up a group life insurance policy. This is a plan where the company agrees to insure the staff for a set amount (normally four times your income although some companies are flexible and offer more) and all staff come under that policy. There are a range of savings in this.
Firstly, the premiums can be considerably cheaper inside a group plan as they are notoriously cheaper in 'bulk'. Secondly the employee benefits as the cost of the premium isn’t a taxable benefit in kind. So in other words, if you were to be paid Â£100 extra per month through normal payroll to go towards your life insurance premiums you would pay tax at 20%, national insurance at 11% and take home Â£69 to buy your life insurance policy. Furthermore your employer would have had to pay Â£12.80 as employer national insurance.
Instead of this the employer could set up the scheme and save the cost of the national insurance and tax and instead the policy will be much more tax efficient.
This is of course on top of the potential 'bulk' saving of the normal costs of life insurance. A group life insurance policy can also have extra benefits for those who are slightly 'off centre' with their health.
Group life insurance policies underwrite (check your health to decide whether to insure you or not) based on an average health and many people can be covered where they would not normally be able to get cover.
They are pretty easy to set up and a good independent financial advisor specialising in the subject would be able to negotiate the very best terms from all the companies available. The costs between the best and worst companies can be very significant.
They will also look at the other benefits that exist within a scheme such as a bereavement service for example. Currently there is over Â£800 billion of life cover in place via group life insurance schemes giving an average life insurance of Â£26,666 if every man and woman in the UK was insured.
Aside from that, if you have your own life insurance policy in place there are a number of things to consider to save you some valuable cash or to keep the premium the same and achieve some valuable extra cover for your family.
If you have stopped smoking for instance, you should have reapplied to your life insurance company as your premiums will be dramatically different. Most insurance companies want to know you haven’t been smoking for at least a year and they will then reassess.
Vegetarians are also able to receive a 6% discount on their life cover with companies such as Animal friends insurance for example. The company claim the risk of vegetarians suffering from some cancers is reduced by up to 30% and heart disease by up to 40%.
Smokers of a pipe or cigars can also save a pound or two by applying to companies who don’t regard them as smokers! Yes, you got it, you have the joy of writing non smoker on the application.
For a free factsheet on group life insurance, call Worldwide on 0845 230 9876, e-mail email@example.com or take a look at our website www.wwfp.net.
Worldwide Financial Planning Ltd are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'