Life insurance is an important kind of cover to have in place, and it’s often highly affordable. You can get covered for the price of a few takeaway coffees per month. For anyone who needs life insurance, it’s definitely a case of the sooner, the better – because the price does go up with age.
The cost of life insurance will always be different from one person to the next because it depends on factors unique to them and the cover they’re buying. Age is one key factor; health is another; so is the amount of cover you buy, what type, and for how long. The younger and healthier you are, the cheaper it’ll be to buy cover. As you get older, or develop health conditions, or you want/need very comprehensive cover, it’ll be more expensive to get insured.
This is why getting people to engage in the protection conversation as soon as it’s relevant is ideal. Taking out cover sooner could help to reduce the cost of it significantly. This can make a big difference with a long-term product like life insurance, which someone could be paying for over many years (all being well).
What affects the price of life insurance?
The price of life insurance is different per person because it depends on a number of factors. Some relate to the customer and others to the cover they’re buying. These include:
- Age
- Personal and family health history
- Lifestyle (e.g. occupation and hobbies)
- Smoking status
- How much cover you’re buying (the amount)
- How long you need to be insured (the term)
- What type of cover you buy (the type)
Insurers factor all of these things in during the underwriting process when someone applies for life insurance, so they can work out how much of a risk an individual is to insure. Like any insurance, the lower the risk, the lower the price – and vice versa.
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Can customers minimise the cost of life cover?
To minimise the cost of life insurance, people are sometimes tempted to cut corners and buy less cover than they need, leaving them underprotected. At Anorak, we put a lot of emphasis on making sure customers always buy cover that adequately meets their needs whilst also being affordable. We do the same the other way too: making sure people don’t buy more cover than they really need, or pay any more in premiums than is necessary.
There are ways to minimise what you spend on life insurance while still being sufficiently covered, but most people would need expert help to identify these. At Anorak, we’ve built them into our algorithm. They include things like factoring in a partner’s future income, or pinpointing the moment when their children will become financially independent, so we can get even more accurate about the potential shortfall. This helps us identify how much and what type of cover is really needed, and how long they really need to be insured. Tweaking factors like these in line with a customer’s needs can bring the cost of cover down significantly.
We also point people towards policies with guaranteed premiums, wherever possible. This way they know what their premiums will be over the life of their policy when they take it out – and they won’t face any unexpected price hikes in the future.
Generally speaking, life insurance policies can be tricky to compare because insurers categorise the same things in different ways – but we’ve done the hard work unpacking all of this and plugging it into our automated advice engine. This means Anorak customers can be sure they’re comparing like-for-like when making important financial decisions.
Is it more expensive to buy life insurance through Anorak?
No, it doesn’t cost anything extra to buy a life insurance policy through Anorak. The price would be the same as if the customer bought the same policy with the same features elsewhere.
As an independent broker, we work for the customer, not the insurer. We’re not obliged to favour any one insurer or product over another. This means we can recommend the cover that is genuinely most suitable and find the best price for it on the market. We do earn commission from the insurer if someone goes on to buy a policy, but the customer doesn’t pay a penny more.
Is the advice free too?
Yes. Customers don’t pay anything for the independent advice we provide online or over the phone. Giving your customers easy access to expert advice makes it much more likely that they’ll end up with the right cover for them – at the right price. Being guided through the process by an independent online broker like Anorak gives people peace of mind that they’ve explored every avenue and are making a truly informed decision when protecting their family financially.
