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  • Writer's pictureRaghvir

Do I need Life insurance- may be tomorrow?

With the advent of online shopping and comparisons sites, there’s always that feeling that a better deal is out there, if you just do one more Google search.

But how often does delaying that purchase decision come back and haunt you? The number of times I’ve found a good flight deal, decided to sleep on it, and then the next day the price has jumped up… Grrr.

When it comes to protection, the consequences of delaying can be far more severe than having to pay an extra £50 for your flight.

There are two big risks for customers who want to defer making that commitment to protecting themselves and their family.

Firstly, nobody knows when, where or if they’re going to get ill or worse. We know the average age of a critical illness claimant is 48[1]. This means there’s a stack of customers who are claiming much earlier than that to balance out those customers who make claims in their 50s and 60s. We also know that certain critical illnesses can be indiscriminate, in that you could be a healthy person and still be diagnosed with cancer, for example.

So, by delaying the purchase of protection, somebody could be really walking a tightrope. If something bad happens, they’re financially exposed. Or if their health deteriorates, they may lose the ability to acquire protection in the future, and if it’s even possible, then it could well be at a higher premium.

Which brings me onto the second big risk involved in deferring the protection decision. Cost.

It’s pretty simple, as somebody gets older, their risk of claiming on any protection contract increases. So, the cost increases. By taking out protection at an early age (with guaranteed premiums) they can lock in a cheaper rate and over the term of their policy be quids in. Here’s an example.

Let’s consider a 30-year-old man who needs £250k life and critical illness cover to protect his family. He thinks he’ll work until he’s 70 so wants a 40-year term. Call us to find out the monthly premium.

Now let’s say he wasn’t sure about taking out the cover and waited 5 years. As a 35-year-old, assuming he was still in good health, he could take out £250k over 35 years (to age 70). The premium will go up. So, as you get older then the life insurance policy will be more expensive for you.

Finally, if he waited until he hit 40, and perhaps he’s had a little mid-life crisis and decides to commit to his protection needs, then the premium for £250k over 30 years would be more higher plus if any medical problem he got at this stage then premium will shoot up.

So given all of this, so ask yourself that how important the life and critical illness protection for your mortgage or family is.

So Bright Sun highlighting the importance of starting the cover ASAP?

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