Online Life Insurance: Finding the Right Policy

Last Updated on: 22nd November 2023, 05:15 am

Life is all about living in the moment, but it’s also necessary to plan for the future. Life insurance is a great way to protect your loved ones financially when you’re no longer around to support them.

Thankfully, buying life cover can no longer be a hassle, with many providers offering online life insurance. However, before you head off online to buy cover, you need to understand which type of policy you need.

How does life insurance work?

Simply put, life insurance is a type of insurance policy that covers you in the event of death. Once you’ve died, your insurer pays out a cash lump sum to your family, supporting them with various financial commitments.

The payout from a life insurance policy can help your family with future expenses. This can include costs such as household bills, covering a mortgage, funeral expenses or clearing outstanding loans or debts.

When you take out life insurance cover, you begin paying monthly premiums to your insurance provider. You need to keep up with these payments otherwise your insurer will end your cover early. In this instance, you won’t receive any money back on the payments made previously.

There are two main types of life insurance…

Whole life insurance (aka life assurance)

Whole life insurance policies cover you for the rest of your life, paying out a lump sum to your loved ones, no matter when you die. The cost of your premiums and pay-out value is fixed throughout – so long as you keep up with your monthly payments.

This means even as you get older or develop health conditions the cost of your cover remains the same. Despite this, whole life insurance is typically more expensive than other types of cover.

Term life insurance

Unlike whole life cover, this type of policy has an expiry date, lasting for a set number of years. The policy only pays out if you die within this timeframe, if not it simply ends and you will have to take out further cover if needed.

Term life insurance has 3 types of cover:

  • Level term – Your payout amount and premium costs are fixed throughout your cover.
  • Decreasing term – Typically take out to cover a large payment, your family would struggle to pay on their own like a mortgage. The pay-out value decreases over time as you make repayments.
  • Increasing term – The payout value increases yearly to protect the eventual amount your family receives from inflation. The main drawback is that your premiums can increase too.

Can I get more than one life policy?

While it’s legally possible to get additional life insurance policies, most people find having one policy is more than enough.

You can, however, get a joint life insurance policy for both you and your partner. This covers two people under a single policy, ideal if you and your partner share an income.

Many couples find joint life cover to be easier to manage and cheaper than taking out separate policies. You can get joint cover for both whole life and term life policies – but note that term life policies have an expiry date.

How can I buy life insurance online?

Once you’ve decided which type of cover is best, you can then go ahead and apply for life insurance online. At one time, life insurance had to be bought in person, but thanks to the internet you can set up your policy online.

With most providers, you will need to fill out a form, answering some questions regarding details such as your:

  • Age
  • General Health
  • Medical history
  • Occupation
  • Smoker status

It’ll also ask you about the type of cover you want and how long you want it to last. Once this has been done, they’ll provide you with a quote – an estimate of your monthly premiums cost.

This can be done directly through the insurance company, comparison site or insurance broker. Here are just a few tips when buying online life insurance:

  • Shop around for the best prices
  • When applying for a quote be truthful with your answers
  • Buy from a company you trust
  • Read company reviews
  • Don’t buy more cover than your family needs

How much cover do I need?

Before you apply for life insurance, it’s important you know the right amount of cover needed for your family. While overinsuring can cost you more than is necessary, not buying enough cover can leave your family out of pocket at a difficult time.

You should assess how the loss of your income could affect your family’s future finances. For example, if you and your partner share an income, they would require less cover. 

However, if you are the main source of income for your family, they would likely need a larger amount.

So what are you waiting for? Head online to give your family the financial protection they deserve by applying for a quote, today!

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