When the holidays arrive a lot of people decide that they need to cut back on some of their expenses and quite often life insurance is at the top of the list. However life insurance is more important than you think and could be crucial to how your loved ones cope financially when you die.
In today’s blog, the Cheapest Life Insurance takes a look at why it’s not always cost effective to cancel your insurance policy to save money.
If you passed away tomorrow would your loved ones have all of the financial support they need to get by? Do you have any debts that would be passed down to your loved ones when you are gone?
Most people believe that when you die your debts die with you but this is just a myth. If you have any money or valued possessions such as a family home or savings, these will then be used to pay off any outstanding debts you had while you were alive before being passed on to any beneficiaries.
Getting life insurance and keeping it means any pay-out received can be used to clear any debts to protect your family financially during a very difficult time.
The main reason why people tend to cancel their life insurance is because they are young, fit and healthy. However, this does not mean it’s a cost saving approach. If you set up your life insurance later down the line when you are older, your premium will increase significantly and if you have suffered with any health problems since you cancelled your last policy you may not be able to afford the cover you once had as the premium could well go up.
Simple factors can dramatically change how much your life insurance costs too. Believe it or not even changing your postcode could raise your monthly premium. Statistics show that people who live within postcodes of less wealthy areas within the UK are more likely to die at a younger age which is why their premiums are higher.
Obviously you can’t move house to cut your life insurance costs, but you can live your life healthily. Perhaps you can give up smoking or reduce your alcohol in-take. In fact, there are so many things you can do to help to keep your life insurance costs low, therefore negating any reason you might have to cancel a policy.
If you are struggling to keep up to date with your life insurance premiums it is always worth talking to your provider to see if you can save money before resorting to cancelling.
So before hitting ‘cancel’ do have a think about the long-term benefits to your life insurance.