Are You Thinking about Investing in Life Insurance?
Life insurance will ensure that, after you pass on, any dependents you name will be financially secure. It can help handle unexpected and expected costs related to your death such as funeral expenses, mortgages and even medical bills.
Generally speaking, if you are interested in life insurance, it is better to set one up sooner rather than later. Life insurance is always more expensive for those at a later point in their life.
You might not be aware of just how competitive the life insurance market is and in this world the consumer is certainly king. Each provider is desperate to make sure that you choose coverage from them rather than another company.
This is why many life insurance policies come with a free welcome gifts. These can be anything from gift cards to pens or even the latest Apple Watches.
Is it worth choosing a policy based on the free gift provided?
That’s one of the questions we’re going to discuss and answer throughout this article. First though, let’s look at some of the real gifts available in the UK right now.
Vitality is currently providing a free gift based on the Apple Watch 4 and 3. With this gift you get £300 off the initial purchase of that product. You will still need to pay £99 towards the overall cost of the item.
There are also monthly payments between £0 and £12.50 which is based on the level of Vitality points that you claim as well. You’re going to need at least 160 Vitality points a month to fully fund the watch.
As well as this, you will need to add a Wellness Optimizer or a Vitality Optimizer to your policy. This amounts to an extra £3.80 per month and your policy needs to have a minimum monthly premium of £30 for a single policy or £40 for a joint policy. Already, the issue with these free gifts begins to become clear but let’s look at a few other examples.
Zurich is offering you the highest monetary value gift card available right now.
When you take out a life insurance policy with this company, you could be looking at up to £420 in Amazon, John Lewis or Love2Shop vouchers.
As with most policies, you have to wait a period before you become eligible for this voucher and when you choose Zurich, this will be when you have paid your 6th monthly premium.
It seems like a while to wait, but when you have those vouchers ready to spend, you are going to forget all about it. You do need to be aware though that this company is offering you up to £420, not exactly that amount.
It will be worked out based on your combined value of the first 6 months premiums, and then rounded down to the nearest £5. Something else to keep in mind is that you are not going to be eligible for these vouchers if you use a comparison website.
As such, it is important to ensure that you are picking up the right policy, and are not just signing up for the reward.
Comparison website MoneySupermarket are currently offering their new clients a £100 gift card to Next, M&S or Argos.
If you want to get this free gift with your policy, you are going to have to take it out online, so make sure that you have read the instructions carefully to ensure that you don’t miss out.
Again, you can only receive your gift card once you have made six consecutive payments and you can have one gift card per policy.
Remember that in the end it is about the policy that you take out and the level of protection it offers you. But, if you are looking for coverage that allows you to pay low monthly premiums and you want to take full advantage of the gift, then this is going to be a good choice for you.
This is because you still qualify for the whole £100 no matter what, as it is not dependent on how much you pay in during those six months. You will be contacted by MoneySupermarket within around 40 days from your sixth payment so they can find out which gift card you would like to receive.
Are the gifts worth it?
The above examples are just a small snapshot of the gifts available to UK consumers looking for life cover.
…but are the welcome gifts worth it?
There are a few problems with these gifts that you do need to consider before you get blindsided. First, it’s important to note that these gifts provide short term benefits.
For instance, while an Apple Watch may seem like a great freebie right now, it’s only going to be relevant for a few years. At that point, you’ll be eager to get the next product on sale and your item will be largely redundant.
Your life insurance policy on the other hand will continue. The same is true for cash payments and gift cards. They may look like a great deal when you get them, but they probably won’t last you for more than a couple of years.
In some cases, they won’t last longer than a couple months and you’ll still be tied down to the policy.
That’s an issue as these gifts are often attached to certain requirements.
The company encourages you to get a large premium to get the best free gift.
A premium that you might not need or may not suit you at all.
For instance, for the £420 from Zurich, you will need a significantly high premium not our basic standard cover while Vitality actually requires you add more items onto your original purchase.
While you could switch to a better policy after you claim the free gift, this is time consuming, complex and often costly. You may find that there is a significant fee to cancel an existing policy.
Does this mean you should avoid life insurance altogether?
On the contrary, life insurance can be very beneficial.
However, you do need to make sure that the overall policy suits your needs and the premium matches your budgets. Don’t choose a policy based on a short term benefit that isn’t going to be relevant in a couple of years.
Instead, wherever you are in the world, look at a gift like this as the icing on the cake of a policy that you have already decided is right for you.