Protecting yourself and your loved ones is an important consideration for any family, but it becomes even more so when you have major financial commitments to consider. While this is something we must all think about in our financial planning and budgeting, choosing a policy that works for you can be a daunting task. 

Not only do you need to choose the right type of insurance product, but you have to consider the cost of your policies. How much can you afford and what affects the cost of insurance?

cost of insurance

Impacts on policy costs

The cost of an insurance policy, otherwise known as premiums, will depend on several factors: 

  • The type of product
  • The length of the policy
  • Personal details

Personal details could include anything from your:

  • Age
  • Marital status
  • Smoking habits
  • Current health
  • Family medical history

Lifestyle choices and occupation can also impact the cost of your insurance premiums. For example, the more high-risk your job or leisure activities are, the higher your premiums may be. An insurer will take all of this into account and assess the overall likelihood of you making a claim, which is ultimately what impacts the cost of your policy or premiums.

How much cover do you need? 

When you consider the variety of protection plans out there, from life insurance to critical illness cover, it can feel overwhelming to decide how much cover you need. Working with a protection adviser will help with this as they will be able to advise on what you need to cover your day-to-day and long term needs. 

The key things you need to consider are your take-home pay, everyday living expenses, existing debts, and housing costs. Pulling these factors into a calculation should make it easier to determine how much cover you need in order to fully protect you and your loved ones.

Do you really need insurance?

This is an age-old question and ultimately the decision lies with you, but it’s essential to weigh the costs of a policy against the risk of being uninsured. For example, if you were to become ill and unable to work, would your family remain cared for? How much of your total income would you lose? Would you still be able to cover your essential expenses, like mortgage payments or rent? 

Should the worst happen and you passed away, would your family be able to cope financially without a life insurance policy in place? 

Some policies won’t suit you or your family situation, and you don’t need every form of protection under the sun. What you do need is assurance. 

After all, the security of knowing that things will be okay if something were to happen will make sleeping at night a lot easier.

do you really need insurance?

How to choose an insurance policy

When you start considering insurance policies, it’s important to note that the cheapest policy may not strictly be the best option for you. While a lower premium may initially seem attractive, it may not provide adequate cover. 

This is why it’s essential to balance the cost of the policy against the benefits and coverage provided. It’s also important to consider any add-ons that you may want to include with your policy. Additional features, like income protection or critical illness cover, can offer extra layers of protection and financial security. However, these add-ons can also increase the cost of the policy. 

Speak with a protection adviser to ensure you’re not paying more than you need to.

Seeking expert advice

Choosing the right insurance and protection policy inherently requires careful consideration, but you don’t need to do it on your own. A protection adviser will help you work out what you need to cover for, what the additional costs and benefits are, and what it’s going to cost. 

Always be sure to compare different policies and providers and seek expert advice when taking out insurance. We’re here to help you make an informed decision that suits both your needs and your budget. 

Get in touch with us today and let’s talk about protecting your family.

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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