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Five Things You Should Know About Life Insurance To Get A Deal That Works - Citi UK

7 August 2017Fixed incomeHighlightsUK

It's fair to say that life insurance doesn't tend to feature at the top of many people's to-do lists. In fact, one in four UK breadwinners don't have life insurance cover – which contributes to a significant gap between individuals' insurance needs and their actual cover. The truth is that life insurance should be an important consideration for all of us, and especially so if your family depends on your income. The later you leave it though, the higher the cost is likely to be. To protect your loved ones and get a deal that works for you, it's time to make sorting life insurance one of your priorities.

1. You could be worth more than you think

It's not always a good idea to rely on the life insurance offered by your workplace. For one thing, it only covers you for the term of your employment – if you change employers later in life, replacing that cover can be expensive. As well as this, policy terms can change year by year and you may not have the flexibility to choose the cover amount you receive.

2. Your policy can be as unique as your needs

There is no one-size-fits-all solution for life insurance, so your policy should always be tailored to suit your goals and commitments. This could include leaving money to pay off a mortgage or to put your children through university.

3. Planning for the future brings peace of mind

Picturing the future is hard for all of us, and choosing a life insurance is no exception to the rule – the immediate pay-out tends to be the first thing people look at. However, if you are the primary earner, or if your family has financial commitments that need to be upheld, you may need a policy that will provide for both the long and short term. We recommend having a conversation with your Relationship Manager to help you figure out exactly what cover you need.

4. Buying sooner tends to cost less

The earlier you purchase a life insurance policy, the less you should typically end up paying. Insurance companies need to factor in that the older the policy holder gets, the more vulnerable they'll be to disease or death from natural causes during the period of cover. This means that premiums tend to increase with age – if a 50-year-old bought a 25-year fixed term policy that would cover them into their mid-70s, for example. A 30-year-old buying the same length policy would be 55 when their cover ends, so would generally be considered a lower risk customer.

If you're able to do so, buying a life insurance policy even a year earlier than you planned could make a big difference in the cost of your premiums. Below you'll find a few illustrative examples of approximate monthly premium costs by age, provided to non-smokers on standard terms.

Client Age:304050
Monthly Premium:£14.38£24.56£54.99

The above premiums are for illustrative purposes only and the following assumptions are made:
Sum assured is £250,000 for a 25 year term insurance policy. Customer is a male, non-smoker, working for a bank, with no health issues. Illustrations produced on 12th July 2017. Actual premiums will vary based on individual circumstances.

These figures show that monthly premiums tend to rise with age. A 40-year-old non-smoker can receive 250k life insurance cover for £24.56 a month, but if they were to wait just one year, that rate could rise by a further 7% (based on same quote for a 41-year-old with the same circumstances at today's rates).

5. You can review your policy at any time

As your circumstances evolve, so too can your cover. Life events such as weddings, new property, births, change of job and even divorces can all affect your insurance needs. This is why it's important to keep your Relationship Manager informed of big changes in your life, as they can advise if you should review your policy to meet the needs of you and your family.

On top of life insurance, it's also important to think about critical illness cover, which may be covered in addition to or separately from life insurance but can be just as important. In fact, modern medicine has made critical illness cover more important than ever. With the right care, many people with conditions covered under critical illness policies can continue to live full lives long after diagnosis. In the event of a life-threatening illness, the right policy can provide peace of mind and protection – perhaps helping to clear a mortgage or reduce the need to work.
Click to know more about life and critical illness cover.

Regardless of circumstances, protecting yourself and your family is an important consideration for everyone. The younger, fitter and healthier you are, the better the deal you could be eligible for – and the peace of mind that comes from knowing that your family is protected is a benefit that can't be overstated. Speak to your Relationship Manager today to find out more about getting the right policy for you.

Investment and insurance products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated.
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1 MoneySupermarket research, 2016 (http://www.thisismoney.co.uk/money/news/article-3387027/One-four-UK-breadwinners-not-life-insurance-buy-life-cover.html)

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