Many of us will hold a life insurance policy. This is often to pay off our mortgage if we pass away before it gets paid off in full. We may also hold one so that our dependents get some money when we pass away to cover any outstanding costs, loan repayments and bills that there might be. Many of us are not getting the best cover from our life insurance though.
Check out what you need
It is worth starting by thinking about what you want form your life insurance and whether you even need it at all. If it is with a mortgage then it is likely to be a condition of your mortgage and you will have no choice in the matter. However, if you have chosen to take out insurance, it is good to think about what purpose it serves and whether it is the best thing for that. For example, some people will want the insurance to cover their funeral costs. They will be paying in monthly for the rest of their life for this, when they could possibly go to an undertaker and pay a one-off fee and have that covered. If they want their dependents to have money, then it could be cheaper to save the money they are paying into the insurance each month and build up a lump sum instead this could build up to being far more than the amount the insurance will pay out. Of course, there is a risk factor here as the person may pass away before they have accumulated enough money but it can be a calculate risk depending on the age and health of the person trying to build up the fund.
Make sure the cover is right
It is wise to take a close look at the insurance policies that you have and to make sure that they cover you for what you hope they do. Sometimes insurance policies are not very clear and they may not pay out when you expect them to. If you are having trouble understanding the legal terms in your policy then call the provider and ask them about it. If you want to check you are covered in certain circumstances, then you can ask them and they should be able to tell you. For example, you might expect one to pay out if you are ill, so that it will cover the bills, but many policies will only pay out in very specific situations and you may not be able to make a claim even if you are ill and thought you would be able to.
It is worth comparing the prices every so often to make sure that you are not paying significantly more than necessary. You may find, that if you took out a policy a long time ago, that you will not find a cheaper one because you have got older and therefore riskier to insure. However, it is still worth checking as you never know. It is extremely useful to have an idea of the range of prices that you might expect to pay for insurance. You could potentially find this out using a comparison website or by getting quotes from different insurers websites.
Once you know how much different insurers charge, you will be able to look at them in more detail to see if they offer good value. You want to make sure that they match all of your requirements and try to find out what they are doing differently that makes then cheaper. They could be all sorts of reasons from not paying out very often to having a customer service department located in a cheap country so you cannot make assumptions. What you do want to be sure of is that you will get the cover that you need. If you do get that cover then you might consider swapping to this company. However, you might want to see what they are like with regards to customer services, company reputation and things like this before. You might be able to find this out by looking at their website, finding out if other people you know have used them and what they think and looking at independent reviews.
This will take time to sort out, but it is worth it. You want to make sure that you are getting good value for money for the insurance that you have. You want to make sure that you are not paying more than necessary and that you have the cover that you need in place. It is good to review this every few years and then you could potentially save money by not paying more than you need to. If you feel that this is too difficult or time consuming it is worth noting that you may be able to find help through an insurance broker or financial advisor.