Life Insurance protects you and your loved ones by paying a tax-free lump sum in the event of your death, or diagnosis of a terminal illness.
For some, it’s an essential protection to have in place, but getting a policy set up can feel complex and confusing. Protection insurance is a highly personal thing to buy, and it’s not as straightforward as other products such as car or phone insurance. That’s why it’s important to do your research and get the best coverage for your needs (we’ve got plenty of Life Insurance guides to get you clued up).
So, where does Martin Lewis come into all of this? He’s a well-known figure in UK media, sharing savvy money-saving tips and financial opinions. And we’re here to share his thoughts on Life Insurance.
Martin Lewis is the founder of popular website, Money Saving Expert. Founded in 2003, it covers everything from bills and mortgages to savings, budgeting and insurance. He’s also a campaign journalist, TV show host and charity founder.
Money Saving Expert has been around for over two decades. It’s gained authority and credibility, becoming the UK’s most popular consumer finance website. His work is thoroughly researched and supported by experts in the field.
Alongside this, he’s the founder of several charities and has been the voice of change for many campaigns, fighting against things like unfair energy prices and changes in tuition fees.
While Martin Lewis isn’t a Life Insurance expert, his work is always researched and he ensures the right people are involved.
You may not like to think about it, but would your family be secure if you suddenly weren’t around? Life Insurance can offer that peace of mind, ensuring debts like your mortgage are covered, and your family’s lifestyle is maintained.
There are two main types of Life Insurance to consider:
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Generally, Martin recommends Life Insurance as a financial safety net for you and your family. It’s a way to buy peace of mind, helping to relieve your loved ones’ financial burden during an already difficult time.
Here are some of Martin Lewis’s key thoughts on Life Insurance:
Martin suggests Life Insurance as something every parent, partner, or someone with dependants should consider. If you don’t have a mortgage, partner, or children, it’s not an essential thing to have.
Martin suggests checking whether your employer provides Death in Service as part of your company benefits package. This is a great perk to have, as it typically offers a payout of about four times your salary if you pass away while employed by the company – regardless of whether the death is work-related. Depending on the payout amount, you may decide that you don’t need any additional personal insurance coverage.
When considering Life Insurance, Martin suggests thinking carefully about how much coverage you need in the event of your death. The amount can be influenced by what you can afford to pay monthly, but a common guideline is to aim for coverage worth ten times the annual income of the highest earner in your household.
While ten times your salary sounds like a huge amount, it helps ensure that there’s enough money to cover ongoing expenses such as mortgage payments and childcare, even with inflation.
It can be overwhelming to think about, so call 02084327333 or email help@drewberry.co.uk to chat to one of our friendly Drewberry™ experts.
Alex Weir
Independent Health & Protection Expert
You’ll encounter two types of payment options for your Life Insurance monthly premiums: guaranteed or reviewable. With guaranteed premiums, the cost is fixed for the duration of the policy, so you know exactly what you’ll pay throughout.
Reviewable premiums might start lower, but they can be adjusted by the insurer over time, potentially becoming more expensive as you get older. Martin recommends looking to the long term, and opting for guaranteed premiums from the start.
It’s crucial to be transparent and truthful when providing information for your Life Insurance application. This ensures that the policy you select is tailored to your needs and will be there for your dependents should they need to make a claim.
Each insurer has its own guidelines regarding pre-existing medical conditions, so Martin suggests seeking advice before purchasing if you have a complex medical history. And we agree. Our experts have insights into which insurers are likely to cover your specific conditions, and have access to the most competitive rates.
If you pass away while holding an active Life Insurance policy, the payout usually becomes part of your estate and could be subject to a substantial amount of Inheritance Tax. Writing your policy into trust means that the insurance payout goes directly to your dependents, bypassing your estate.
As well as being more tax-efficient, it can also speed up the process of distributing the funds. If you’re confident in all-things tax, you can choose to set up the trust yourself, but if you’re not savvy on these matters then it’s best to get expert advice.
Life Insurance premiums tend to rise as you age, so it can be hard to bargain-hunt as the years progress. However, Martin suggests savings can be made in certain situations:
In any case, regularly reviewing your policy, comparing quotes, and getting expert advice will ensure you get the best rate. Give us a call on 02084327333 or email help@drewberry.co.uk to chat through your options.
As you can see, there’s plenty to consider when getting a Life Insurance policy. It can easily become complex and confusing, especially when you consider some of the language used within the insurance industry.
With this in mind, our team is here to help. We’re qualified advisers, supporting many clients with their Life Insurance application. We can help find you the most suitable policy for your needs and budget. Give us a call on 02084327333 or email help@drewberry.co.uk, we’ll be happy to help.
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