Should You Ditch Life Insurance To Save Money?
This post may contain Affiliate Links
This is a sponsored post
With the current economic climate, many of us are looking for ways to save money, and canceling insurance premiums that feel unnecessary could be one way to do that. However, it may well be worth looking at what your life might look like without the safety net of an life insurance payout.
People have insurance for lots of different things. This ranges from legally required insurance such as home and car insurance to life insurance, pet insurance, and even some temporary types of insurance such as wedding insurance.
Should You Ditch Life Insurance To Save Money?
When looking to reduce your outgoings, it can be tempting to ditch some of those insurance premiums to try and save cash.
But could you be doing more harm than good in the long run?
It can be tough to think about what might happen in the future, especially right now when there is already so much doom and gloom in the present.
We often assume that a partner dying unexpectedly or a family member becoming terminally ill is something that happens to other people.
But, if it does ever become your reality (and I sincerely hope it doesn’t) then having life insurance or income protection insurance is paramount.
For us as a family, both of these types of insurance is non-negotiable. My husband earns double what I do, so without his income, I know I wouldn’t be able to afford our mortgage and all the bills on my own.
I can’t imagine getting devastating news and top of that worrying about keeping a roof over my and my daughter’s heads.
If you have a life insurance policy, I would wholeheartedly suggest looking at other ways to cut your bills before ditching it compleltely.
Can I Change Life Insurance Providers To Save Money?
You can chnage life insurance providers whenever you like but this can cause some issues and is unlikely to save you money unless you were paying an exceptionally high rate to begin with.
You may find that the premium increases rather than goes down or that you are required to take a new medical exam which is something some insurers require, although is often dependent on your age.
Many life insurance companies have a two-year period before you can make a claim, so by changing providers, you may well have to start this period again.
If you have additional clauses you would like added to your life insurance policy then it’s always worth ringing your provider to see if they can accommodate these before switching.
How Can I Save Money On Insurance?
While I recommend keeping life insurance if you already have it, there are plenty of ways you can save money on other types of insurance, such as car insurance and home insurance, both of which are legal requirements, and travel insurance for when you head off on your holidays.
Never Let Your Car Or Home Insurance Auto-Renew
While insurance companies are no longer allowed to offer new customers better rates than existing ones, it’s still never worth it to auto-renew without at least checking whether there is a cheaper deal out there first.
Last year I got my dates mixed up and we ended up auto-renewing our home insurance (yes, I’m a terrible money blogger sometimes!). This year I was determined not to make that mistake again and we found a policy that was over 50% cheaper for exactly the same coverage.
Use An Insurance Comparison Site
There are plenty of insurance comparison sites out there, including Compare The Market and Go Compare.
These sites provide the quickest and easiest way to find a cheap deal and they save all of your details so there is no endless form filling each year, just a quick look through to ensure nothing has changed.
However, if you want to get the absolute best prices, it’s worth checking several different comparison sites and then getting quotes direct from providers who aren’t listed such as Churchill and Direct Line.
This approach can be especially effective when looking for car insurance for new drivers as it ensures you have covered all bases when looking for the most cost-effective car insurance policy.
Annual Policies Vs Individual
When it comes to travel insurance it might be worth paying a little bit extra for an annual policy if you’re likely to travel abroad more than twice a year.
Do double-check that you’re fully covered though, for example, you might not be covered if a later holiday involves extreme sports, such as snowboarding.
Make Sure Your Data Is Correct
When getting renewal quotes remember to update anything that might have changed. For example, some jobs actually see cheaper car insurance premiums than others.
Our car insurance premiums reduced significantly when we stopped working at a pub, I guess because there was less chance of drunk people damaging our car!
Factor In Freebies And Discounts
It’s also worth weighing up any freebies and discounts offered by comparison sites. Some offer vouchers when you take out a policy, such as a £20 Dominos gift card.
Compare The Market is well known for its Meerkat Movies and Meerkat Meals which gets you 2-for-1 cinema tickets and meals.
I’d be happy to pay £10 more for a policy that got me these offers for a year as it would save me so much money over the course of the year.
Leading life insurance broker Reassured have compiled a list of the top life insurance with free gift offers, which is a helpful resource if you are looking for the best available freebie.
How To Get Cheap Cinema Tickets (Less than £3)
While I know things a really tough at the moment, ditching life insurance or pet insurance could have a huge impact on your future finances at an already difficult time.
I fully acknowledge some people will need to cut these out for the moment as there is literally nothing else to cut from their budget to make ends meet and that’s okay – I just don’t recommend it as a general money-saving tip.
And even though I love writing about money saving, I know I don’t have all the answers, so here are some resources that might help if you’re really struggling.
MSE – 10-Minute Benefits Check
Citizens Advice – Help If You’re Struggling To Pay Your Bills
