Life Insurance: What Does Martin Lewis Think?

What Is Life Insurance?

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:

• Term Life Insurance
  This covers you for a specific period, such as 25 years. It’s ideal for matching the length of your mortgage, ensuring it’s paid off if something happens to you during that time
• Whole Life Insurance
  This covers you for your entire life, guaranteeing a payout upon your death, provided you keep up with premium payments..

Learn how it works in our five-minute video 👇

Martin Lewis’s Thoughts On Life Insurance

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:

It’s A Must If You Have Dependents

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.

See how we helped personal finance blogger Mrs Mummypenny secure a Life Insurance policy to protect her three boys.

Check Your Employee Benefits Package

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.

Think About How Much Cover You Need

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

Go for Guaranteed Premiums

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.

Be Totally Honest When You Apply

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.

Write Your Policy Into Trust

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.

Grab Savings Where You Can

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:

• If you previously purchased your policy directly from a bank or insurer, without shopping around
• If you’ve made healthy lifestyle changes since first taking out a policy, like quitting smoking or leaving a risky job. (Always be truthful; dishonesty about your smoking status can invalidate your policy).

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.

How To Buy Life Insurance

Martin Lewis advises that buying through a broker is the cheapest way to get Life Insurance. When you buy directly from an insurer, it’s known as a “non-advised sale”, meaning your purchase isn’t protected by the Financial Conduct Authority if it turns out the policy isn’t suitable for you.

With an “advised sale”, you also benefit from tailored advice on your personal situation. If you’re not sure what kind of policy you need, or if you have pre-existing medical conditions, it’s best to speak to an expert (like us at Drewberry) who’ll do the heavy lifting for you.

Use our online quote tool to get an idea of costs, and one of our experts will call you back to chat through your options.

Compare Life Insurance Policies And Get Expert Advice

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.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to issues as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

• There is no fee for our service
• We are an award winning 🏆 independent insurance broker who works with all the leading UK insurers
• You’ll speak to a dedicated expert from start to finish
• We are very proud of the 3900 and growing independent client reviews rating us at 4.92 / 5
• Claims support when you need it most.
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐