The rising cost of living and your life insurance policy

By now, you're probably feeling the effects of the current cost of living crisis in the UK. For most of us, this means our outgoings are on the rise and thinking of ways to cut down spending has become the norm. So let’s take a closer look at what the rising cost of living means for your life insurance policy.

How will my policy be affected?

Don’t worry! If you already have a life insurance policy in place, your cover will not be affected.

When you initially arrange your life insurance policy, you are asked some questions about your health, occupation, and other questions about your lifestyle. Your life insurance premiums will be based, in part, on this criteria. Therefore, any outside influences, such as the cost of living crisis, would not affect your life insurance premium.

Thinking of cancelling?

If you already have a life insurance policy in place, you shouldn’t rush into cancelling it, and here’s why…

Firstly, cancelling your life insurance policy could leave you at risk if the worst were to happen. Without the right financial protection in place, your loved ones could struggle to pay for your funeral, the remaining balance on your mortgage, any remaining debts you may have - just to name a few!

Plus, the younger you are, the cheaper your life insurance policy will be. For example, if you took out the same policy today that you did 5 years ago, it could be more expensive as you are now five years older.

Is now a good time to get life insurance?

Looking into life insurance is a personal choice and only you will know the right time for yourself. But there’s never a bad time to get life insurance.

In the current climate, one of the most important parts of having a life insurance policy is the peace of mind and security it can give you. With a policy in place, you can rest assured knowing that if the worst were to happen, your loved ones would be financially protected.

Getting the most out of your policy

Many of the UK’s leading life insurance providers now offer free additional benefits with your policy!* These benefits can include, free 24/7 GP appointments, nutrition plans, therapy courses, and more! These free additions on your policy typically extend to your immediate family, so your loved ones could benefit from them too!

Your policy is not just there to financially protect your loved ones, as these added services are so valuable and definitely worth making use of in the current climate.

How can indexation help?

Indexation, sometimes referred to as ‘future proofing’, is essential to ensure your life insurance policy retains the same value as it does now, in the future.

Inflation has reached a 40 year high in the UK and whilst this is a scary statistic, having an index-linked policy can help your life insurance policy combat inflation.

Whilst providers can handle indexation slightly differently, they all work in a similar way. By agreeing to adding indexation to your policy, this means your pay-out amount can increase roughly in line with inflation, but your premium may also increase in line with this. This can be really useful as it helps your policy retain its value, even if the cost of living goes up again in the future. But if you aren’t happy with the premium increase, then there’s the option to opt out of this add-on at any point.

Struggling with payments?

If you’re struggling to keep up with payments or are concerned about your affordability - don’t suffer in silence, we are here to help!

At Caspian, we have a dedicated team who can assist you if you’re struggling with payments. So don’t jump the gun and simply cancel your policy as this could leave you and/or your loved ones struggling financially.

We can look at rearranging your cover to better suit your current affordability, removing indexation from your policy, or even amending your cover amount to try and give you cheaper monthly premiums. If you need guidance, do not hesitate to get in touch! Call our team on 0161 241 6146 - we are happy to help!

*Free benefits offered are not contractual and may be withdrawn by the provider at any time.