Archive for April, 2013

The need for life insurance in today’s society is obvious to most. Thanks to the ever increasing cost of living, many dependents simply cannot survive if they are not adequately provided for within the appropriate insurance arrangements. But for many, affording life insurance can be a challenge, especially if the insurance companies themselves are reluctant to take you on.

Smokers life insurance

The Effect of Smoking on Life Insurance Premiums

One key sector of individuals that insurance companies are particularly wary of are smokers. When cigarettes were first invented they were actually marketed as a health choice and adults of all ages were actively encouraged to start smoking. However, we now know that smoking is not only unhealthy but can actually increase your chances of contracting some serious illnesses and decrease your life expectancy, which is why a lot of insurance providers are looking the other way when a smoker wishes to apply for life insurance.

For those companies that still do provide life insurance for smokers, the cost of the premiums can be exceptionally high. One study carried out in 2012 showed that life insurance companies can charge individuals who smoke up to four times as much for the same life policy, simply because of their habit. But there are ways to ensure you are getting the best value for money.

How To Reduce Premiums On Life Insurance For Smokers

Obviously a smoker can easily reduce their life insurance premiums in the long term simply by stopping smoking. After only 12 months without cigarettes there is the potential to see great improvements in an individual’s overall health which means less risk to the insurance company and therefore lower premiums.

Though a past smoker may never reduce their premiums to the same level as a consistent non smoker, once you have given up for more than 12 months it is worth contacting your insurance company and negotiating an improved premium based on your new situation.

However, as a smoker, you don’t have to wait a year to start improving your life insurance premium costs.

The first step is to shop around. Don’t settle for the first policy that you find. By using an online life insurance brokerage such as ourselves to compare the range of policies available, it may be possible to significantly reduce your premiums immediately. Remember, if you are changing your life insurance provider, you must ensure your new policy is in place before you stop your existing cover to ensure that you are continually protected.

Furthermore, if you are asked to go for an insurance medical, always agree. The risks of smoking on your health and life expectancy are considerable but they do vary from person to person. If you feel that your level of health is above a normal smoker, providing evidence of this could reduce the level of perceived risk that the insurance company have to take to insure your life and therefore may reduce the overall cost.

Above all be honest.The major reason life insurance claims are declined is because the information provided by the applicant was inaccurate. Even if you get the cheapest smoker’s life insurance possible, if your dependents cannot benefit from your investment, then any premiums you pay will all be for nothing.

For further information please visit our smokers life insurance page.

There are many situations when a joint life insurance policy can be cheaper than paying out for two separate policies, making it seem the most attractive option.

However, before taking out a joint life insurance policy consider the following points and ensure that you make the decision that is going to be right for you.

Single or joint life insurance

1. Who Should Be Protected

Though joint life cover is held in the names of both individuals, it is only valid on a ‘first death’ basis. This means that as soon as one policyholder has died, the insurance provider will issue a payment and the cover will immediately expire. This leaves the second policyholder with no protection at all, even though they have been paying premiums for years.

Such a policy could be ideal for those with a mortgage that simply want to pay off their debt and have no further funds available to them. However, if such a policy has been taken out to provide protection to children or other dependents, then the benefit of joint life cover can be severely lacking.

Furthermore, if a remaining policyholder then decides to take out a single life insurance policy, they will find that their increase in age and possible deterioration in health may mean future premiums could be significantly higher. Therefore the benefit of paying joint cover for years has amounted to nothing. Only by having separate policies is it possible for every individual to have the personal cover they require.

Please note that here at Insuranet we can arrange a ‘second death life insurance policy’ which would pay out on the death of the last remaining partner. If you are at all unsure which type of policy is best for you then please feel free to speak with one of our friendly adviser who can talk you through all of the options.

2. The Level of Cover Required

An individual life insurance policy is based on the cost of replacing your contribution to the home, should you no longer be able to provide it yourself.

However, for joint life insurance policies, the level of cover provided is equal for both parties and is usually calculated on the amount required to replace the income of the higher wage earner.

This means that the partner that requires a lower value of life insurance will pay premiums for a level of cover that is simply not needed. In addition, if the main breadwinner adds extras such as critical illness to his policy, both parties will be charged for the same additions, creating further unnecessary expense across the policy as a whole.

Always assess the level of cover required for each individual policy and ensure no on is paying for more or less cover than they need.

3. The Level of Risk

The cost of life insurance premiums is calculated in direct proportion to the risk associated with protecting the life of the applicant. However, in the case of a joint life insurance party, the level of risk is calculated jointly rather than in terms of each individual person.

Should one partner have a lifestyle that is deemed risky or, have a medical history that puts them in a higher risk category, both applicants will be priced according to this maximum level.

When it is clear that the risk associated with one life insurance applicant is significantly higher than the other, separate life insurance policies may turn out to be considerably cheaper and provide better all-round protection.

Author Bio:  This article was written by Steven Keogh who has worked in marketing within the financial sector for many years now. For further details please visit his Google+ page.