Posts Tagged: Smoker

Life insurance – Tackling the top reasons why we put off buying it

OK, thinking about your own mortality is not a topic anyone enjoys, but our own death is one of the few certainties in life. So why do 35% of Canadians not insure their own life to make sure their family or loved ones are financially protected? While the number of reasons likely match the number of people not insured, the following are the most commonly heard.

Reason #1 I dont have a need for life insurance:
Lets be honest, this reason is by far the most common and for most people untrue. Unless you are an individual who does not have children, has money on hand to cover all debts and funeral expenses, and does not feel the need to offset the loss of their income to a spouse, leave any additional money to family, or to a charity, then it may be true, you dont need life insurance. But few people have the funds readily available to fulfill all their wishes or meet their obligations after their death.

At the very minimum, if you have anyone who relies on your income for their day-to-day needs like a spouse or children, or if you have debts like a mortgage, then you likely need life insurance.

Reason #2 Life insurance is too expensive:
If in the past people have found life insurance to be too expensive it could be because of the type of coverage they were seeking, like whole or universal life insurance. Term life insurance is the most affordable of all the products and is very popular because of it.

Term 10 Life insurance, the most popular Term product in Canada, offers a premium guaranteed not to change for 10 years.

A male non-smoker seeking 100,000 in coverage could be paying as little as*:

1125 for a 30 year-old
2129 for a 35 year-old
3157 for a 40 year-old
4207 for a 45 year-old
5281 for a 50 year-old

A female non-smoker seeking 100,000 in coverage could be paying as little as*:

6106 for a 30 year-old
7112 for a 35 year-old
8133 for a 40 year-old
9163 for a 45 year-old
10219 for a 50 year-old

As you can see, for very little money a year, you can get 100,000 in life insurance coverage.

* Lowest quote online from October 2005 for a Term 10 policy, one of the most popular life insurance products in Canada. Premiums shown are the rates if paid annually.

Reason #3 I dont know anything about life insurance and dont know where to start:
A number of free online tools have been developed to help you decide which term life insurance product is best for your specific situation and how much life insurance coverage you should get.

1Term Life Insurance Analyzers. By answering a few simple questions, these tools will assess your needs and let you know what product is most commonly recommended for people with similar lifestyles.

2Term Life Insurance Calculators. These tools will help you put a pound value on the amount of coverage you need in order to ensure that your family, loved ones and your debts are covered in the event of your death.

Reason #4 Life insurance is a hassle to get:
Thanks to the Internet, getting term life insurance quotes is now fast and easy. If you want to shop around first, getting quotes online means you can avoid hard-sell tactics by someone sitting across from you. There is no sales pressure or obligation to buy when you get quotes online. Its easy, can be done any time at your convenience and is simply a better way to shop for life insurance because of it.

Insurance News UK Ex-Smokers Reportedly Paying Too Much For Life Insurance.

According to recent life assurance research by Sainsburys Bank, many ex-smokers may be paying too much for their life insurance. They assert that during the past 5 years approximately 6.78 million people have given up smoking, however only a quarter of these people have informed their life insurance company.

Time requirements differ between insurers; however, many companies consider a person to no longer be classed as a smoker after one year following quitting. By contacting their insurance provider former-smokers can get themselves re-classed as a ‘non-smoker’ and potentially saving thousands of pounds over the term of their policy.

According to their estimates, this means that there are up to 2.2 million ex-smokers who could be wasting at least 126.72 million simply by not reviewing their life insurance requirements to show their healthier status and reflect that they are no longer a smoker.

David Picket, the life insurance manager of Sainsburys Bank said, “The health benefits of giving up are well known, and with a packet of cigarettes now costing over 5, the financial savings can also be substantial. However, once youve successfully quit, you could also make a saving in your annual life insurance premiums if you review your requirements.”

Most policies require ex-smokers to have given up permanently and it is possible that even a couple of cigarettes in the pub on a Saturday night can consequently invalidate cover; however there can be big savings available (over 30%) for those who have completely quit. But despite the potential savings that are available, most people do not think to update their life insurance policies and so lose out.

Over the last few years, increases in the level of competition, has lead to large reductions for potential policy holders, with basic term life insurance policies now costing as little as 5 per month for a young and healthy non-smoker.

Life insurance comparison site Moneynet has good news for existing policy holders too, If you have existing Life Insurance Policies which were taken out some time ago it could be worth considering a change. Most Life Companies have considerably reduced their premiums over the last few years to take account of longer life expectancy and the advances in medicine.

The costs of life insurance can vary significantly depending upon age, lifestyle and occupation, as well as between different life insurance providers, as not all providers evaluate the levels of risk to be insured in the same way. The ease with which it is possible to check the difference in insurance premiums between providers through the financial information site The Motley Fool, Moneynet, or countless others which have sprung up in recent years, has also lead to increases in public knowledge and competition within the industry further driving down the costs.

While the news seems to be good all round for consumers it must be noted that as with all financial decisions, changing insurance cover can be complex as the number of providers and different products increases and the costs of making the wrong decision could prove serious. It should be noted that levels of cover can vary widely and therefore a professional independent financial advisor should be sought if in any doubt regarding a products suitability.

Disclaimer:

All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.

You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

Useful resources:

Life insurance comparisons – Moneynet ( http:www.moneynet.co.ukinsuranceindex.shtml )
Financial information – The Motley Fool ( http:www.fool.co.ukinsuranceinsurance.htm )