Top 5 - Life Insurance Tips

The most important thing is that you protect yourself, your family and your home.

See video transcript

Hi, guys, I'm Dan. This is Kye here again from Crescent Mortgages, and today we're going to be giving you our top five tips for life insurance. What do you think about life insurance Kye? Yeah, I like it.

I've got some. Me too, as we should do. Yeah, we've got mouths to feed haven't we. Yeah, yeah. I've got children. You've got a dog. It's an interesting topic in life insurance. A lot of people don't want to take it.

It's an extra expense. And obviously, in an ideal world, you'll never actually receive a penny from the insurance because if you do receive a payout, unfortunately, it means that you've either passed away or become seriously ill. But it is something that is very, very important, especially if you have a mortgage or you have dependents.

So we're going to jump into it now and give you our top five tips give you lots of information. Hopefully, you find it helpful. Number 1 it's more than just life insurance, so life insurance is the kind of the general term that you hear.

But it does kind of encompass lots of different types of insurance, so life insurance will simply pay a lump sum to your family or your beneficiaries if you die. It's pretty straightforward. There are other types of cover, such as critical illness cover, which will pay a lump sum to you if you become seriously ill.

The big four illnesses are cancer, heart attack, MS and stroke, but there are lots of other illnesses covered. Income protection, which will pay you a regular monthly income if you're signed off, work by your doctor. And another one is family income benefit, which will pay a regular income to your family.

Again, if you pass away anything to add on that, they're all built for different scenarios and different people. We'll touch on reasons why you take different covers later, but all of them have their merits and they all have their weaknesses.

of course, as well, and that's why in picking the right one and taking the advice important. Number two, don't always take the cheapest option, so life insurance, especially for other types of insurance, such as critical illness cover is not really the kind of thing that can just be kind of picked off the shelf.

So the quality of the cover varies drastically from one insurer to the next. So if you find the cheapest cover online, which may be, let's say, £2 or £3 cheaper than the next best option. That policy, if it's a lot worse, it maybe has less illnesses covered or the severity of the illness before you can make a

claim differs. Then it means that the likelihood of a payout from one policy to the other can be a lot lower. So this is why you really do need to get some advice to make sure that not only are you finding something that is good value, of course you want something that's good value, but you need to

make sure that you aren't significantly sacrificing the quality of the cover. Yeah, I couldn't agree more. I think that buying off the shelf is impossible really and phoning an insurance company directly. You're only going to get their own thoughts, their own opinions.

You really do need to shop around. That is right, but you can't really do it yourself or the consequences of getting it wrong and taking something that's not as good is potentially quite different. And not the outcome you want.

So, yeah, taking advice is the biggest thing I would say to do. Number three, consider the right times to take out life insurance. This should be a relatively quick point because we'll be able to elaborate on point number five.

But some of the common times when you should be looking to review your life insurance might be when you change your job because possibly any employee benefits would change. Or if you leave your job, you potentially become self-employed, then you definitely want to review it as you won't have any benefits as a self-employed person.

If you take out a mortgage, of course, you then have a huge amount of debt over your head. So that's definitely a time to review the cover. And that's the most common sign that as mortgage advisers, we will review that with our clients.

If you have a baby, that's a huge one. If you have dependents, you really are going to need to look at life insurance more than if you're just worrying about yourself. So these are some common times that you should review it.

But in reality, regardless of any of those, if you don't have any cover at all, really, it might be time to start thinking about it and contacting an adviser to find out what right for you. Number four, there are different types and different amounts of cover to suit every budget, so you don't just have to break the

bank and spend hundreds of pounds on on life insurance. And then the flip side of that, you know, you don't necessarily want to get the absolute cheapest, you probably, as long as you're relatively young and healthy, you can probably get life insurance for as cheap as £5 a month, which, you know, to be honest

, is better than nothing. But don't just go for it because it is the absolute cheapest. So whoever you are, whatever your budget, that is going to be the right amount to cover for you. Yeah, I think beyond that, the sum is better than none.

saying comes in. It comes in quite a lot here. I think, if you had £10,000 of cover, whilst that might not feel like a lot of money, in some scenarios, if you've got a big mortgage, somebody drops ten grand into your account, you'd notice it and that's any costing you £10 - £15 a month

. You probably wouldn't notice £15 coming out of your account. So, yeah, it's pretty important that any budget is workable and again, I probably sound like a broken record. But coming back to the advice side of it, that's where it comes in and you'll get as much as you can for the price that you're comfortable with is important.

. If you make it clear to your advisor exactly what your maximum budget is and they can obviously do their absolute best to to find you the right cover within that, it might be that you're coming to us with a specific budget.

Or it might be that actually you don't have a budget, you want some comparisons, you want to find out what you can get for your money before you make a decision. And if that is the case, absolutely fine and your broker, or insurance advisor should be able to give you different options, so you can

decide what's right for you. Number five, why take life insurance, so you really have to think about what the implications would be to you and or your family if something were to happen to you? So, yeah, realistically, a lot of people don't.

don't like this type of cover because again, is an extra expense. But you have to think if you were to pass away in your current situation, let's say you've got a couple of kids, you've got a mortgage if you were to pass away.

Realistically, what would your family do? So if you have a really good answer to that currently, then maybe life insurance isn't essential for you. You know, if you have £1,000,000 in the bank, if you have, you know, ridiculously wealthy family that would wouldn't think twice about giving your family hundreds of thousands of pounds, then maybe you don't

need to look at cover. Although, you know, for the sake of relatively cheap premium, you would still consider it. But if you don't actually have an answer to that and really, you're just hoping that nothing's going to happen to you, really, you do need to be a bit more sensible and actually start to look at, you know

, taking out a cover so that you do have something in place if something happens to you. That's not just life insurance. That's obviously critical illness cover as well. Income protection. If you became ill all of a sudden and you weren't able to work, have to take time off work after a while, your work benefits would start

to dry up?.And actually, then you wouldn't have the same income? How would your family survive? Could you maintain food bills? Could you maintain your mortgage payment? If the answer realistically is no, unless you had to move house, which of course no one wants to do, then you really should be looking at taking out some cover

. Yeah, if you are ever on on this side of it and you're giving me advice, you'll hear people talking about needs as a phrase. And I've seen it some times from insurance companies when talking to people.

And the idea is, you want to figure out, you know, what is it that you're protecting? And once you figure that out then it's putting the puzzle together, if you will, to plug the gap. And there are loads of different options, as Dan said earlier.

But yeah, I think it is very important that you have a look, you have a look at your situation. And again, as Dan said, if you can't answer the question well, then you probably should at least look into that.

At the very least, look into it. I'm well aware that if something serious were to happen to me, Belle will be out on the street. So for that reason, I've taken out a very comprehensive amount of insurance, and I can rest assured that if something does happen to me, she's going to live a life of luxury forever

, and that makes me really, really happy. OK, guys, that was our top five tips for life insurance, we hope you found it really helpful. As always, any questions? Drop us a message or give us a call. You know, me and Kye have spoken about, we can see that a lot of our followers are, you know, people in

a similar demographic to us, you know, young men and women in your thirties, maybe with a couple of couple of young children. It would be really interesting to know actually what kind of percentage of you guys do actually have life insurance.

It really should be extremely high. So again, if any of you do not have any cover at all, now maybe is the right time. Hopefully this is just giving you a little bit of inspiration to start to look into it.

I mean, obviously we are life insurance advisors so we can assist you with this. But ultimately, it doesn't matter whether you do it through us or through another broker or adviser. The most important thing is that you protect yourself, your family and your home.

You just call us young. 33.