Life Insurance Money Saving Tips for UK Women [2024]

Recent research showed that just 38% of women in the UK have life insurance protection in place and just 18% critical illness cover.

This figure could be low in part because there is a common misconception that stay-at-home mums do not require financial cover and that only the family breadwinner needs protection. But consider for a second all the unpaid jobs a stay-at-home parent fulfils; childcare, cook, taxi service, cleaner, mentor, to name a few.

According to daynurseries.co.uk, full-time childcare (50 hours a week) alone now costs on average £305.11 a week. That equates to a staggering £15,865.72 a year per child!

Another reason why life insurance penetration is so low at present may be because families are watching their monthly outgoings because of high inflation and the current cost of living crisis. In many ways this makes perfect sense as you pay a premium every month, but you never know if this selfless investment will ever pay you back.

However, life insurance provides a vital safety blanket for a worst-case scenario. This is especially relevant if you have young children who rely on you. A life insurance pay out can clear the mortgage, enabling your loved ones to remain in the family home, or leave an inheritance to provide the kids’ education and/or cover rising living costs.

Not having to worry about your finances after a bereavement can be reassuring at a very difficult time, allowing you to focus on what is really important.

As a result of the invaluable peace of mind life insurance can provide, we have collaborated with a local insurance expert to unearth 7 top money-saving tips in 2024…

1. Consider a free welcome gift card

Life insurance providers, such as Legal & General and Aviva, offer a free welcome gift as an incentive for you to purchase a policy directly from them, (as opposed to going through an intermediary).

The gift usually takes the form of a gift card from the likes of Amazon, M&S or Love2Shop. The highest value gift at the time of writing this article is Compare the Market offering a £250 Amazon gift card.

Life insurance broker Reassured has created (and importantly maintains) a life insurance with free gift guide, detailing the best present-day offers available.

You will need to pay 6 months’ worth of premiums before being eligible for the free gift and your premium usually needs to exceed a certain threshold.

Whilst a free gift can be enticing, the single most important thing is that you secure the lowest possible premium price. Even a small saving each month would dwarf the monetary value of the free gift over the lifetime of the policy. However, that said, if all quotes are very similar in price, then why not treat yourself to a £250 Amazon gift card.

2. Always compare multiple quotes

When shopping for life insurance the single most important thing is to compare multiple quotes as costs can vary significantly between providers due to different underwriting processes. What one insurer may deem to be high-risk, another may not.

It is possible to run your own research comparing different prices, however this is obviously very time-consuming. A more efficient method is to use either a reputable comparison website or the services of an FCA-regulated insurance broker.

A comparison website can be a good option if you know the type of policy you need and what you need it to cover. However, if you require more support and have questions then employing the services of a broker is usually a better option.

A broker can run you through the application process, pick the jargon, compare multiple policy types, help write your policy in trust and offer advice; usually without charge (as they make their money by earning a commission from the insurer for a sale).

3. Take out cover whilst you are in early adulthood

Historically people only think to take out life cover after a major life event, such as having a baby or buying their first home. However, your age at the point of application is the most influential cost factor and so the earlier you can secure a policy, the cheaper it will be (as statistically a claim is far less likely).

Why not be proactive and lock in the lowest possible premium in early adulthood for decades to come. Premiums could be as low as 15p a day for approximately £200,000 of cover.

4. Accurately calculate your sum assured and term length

A great way to save on your monthly premiums is to take the time to accurately calculate how much cover you require (the sum assured) and how long you need cover for (the policy term).

This is because the greater the sum assured and the longer the policy term, the higher your premiums will be. And so, it is beneficial to calculate exactly how much cover you require to ensure you are adequately protected but are not paying unnecessarily for more cover than you need. Consider key factors such as your remaining mortgage balance, the cost of childcare, any outstanding debt, future living costs, household bills etc.

Regards the perfect term length, usually, it makes sense to ensure you have cover in place for as long as your children are financially dependent on you and/or until the mortgage is cleared.

A couple of top tips. 1) If you have cover through your employer (like death in service benefit) factor this in to help lower your personal sum assured. 2) Consider a policy that includes a special events option, which allows you to change your cover amount/term length if your circumstances change (like extending the family).

5. Consider a joint life insurance policy

If budget allows, it is usually more beneficial for you and your partner to take out two separate policies, because this potentially means two payouts and therefore double the coverage. However, it also means paying two monthly premiums.

In contrast, a joint life insurance policy covers both lives simultaneously under a single policy and only requires you to pay one premium a month. It could save you up to 35% compared to two single policies and so if your budget is tight, it could be a good option.

The downside of joint cover is it will only ever provide one payout, after which the policy elapses leaving the surviving partner without cover. What’s more if one of you has a pre-existing medical condition or for example are a smoker, then it will inflate the overall premium.

In summary

Granted, life insurance is not one of the most glamorous purchases you will ever make. In fact, it can force us to consider some uncomfortable scenarios of how our loved ones may cope if we were no longer around to provide. But that does not mean it is not vitally important to have reassuring financial protection in place, especially if you have dependants who rely on you.

We hope the above article has provided some genuinely useful tips on how you could save on your monthly premiums during what is for many UK families a tough economic climate.