Tag: conceptfinancial planning


Term vs whole of life insurance- which is best?

Regardless of your religious beliefs, death might not be the end – your mortgage and financial obligations could outlast you! This is where the right life insurance comes in. Deciding whether you need term or whole of life insurance can be tough, not least because of widespread confusion about the benefits of each type of policy.

Whole of life insurance is designed to last as long as you do. You pay a premium every month and your loved ones receive a payout when you die. These policies are often considered the crème de la crème. However, for some, term insurance can be an appropriate choice.

Term insurance only covers you for a set period, 25 years, for instance. However, policies are often cheaper for younger clients and there will still be a cash payout if you die within the set period. Mortgage life insurance may only cover your outstanding mortgage, so it might be worth thinking about getting a policy that includes more if you want to leave your family with a nest egg.

One benefit of term insurance is that it gives you the greatest death benefit for the lowest premium when the policy is first issued. This said, it might not be the cheapest over the full duration of the coverage required. Because term premiums increase at each renewal, for older people premium costs will far exceed the premium that would have been charged for a whole life policy had it been originally purchased.

If you think you only need life insurance for a short period, term insurance is likely to be the cheapest option. Typically, term insurance is the best option if cover is only needed for 10 years or less. Of course, for long periods, whole of life insurance might be your best bet.

Increasing term insurance policies can also be a suitable option. These differ from regular term insurance policies in that the size of the payout increases as the term of your policy continues. Put simply, this means the later in the term you pass away, the larger the payout. For example, a fixed term policy initially worth £100,000 with a 3% annual increase will be worth £130,477 ten years in.

For those who might want to take out life insurance to cover debts like a mortgage in the event of their death, decreasing term insurance might be the best option. As the name suggests, the payout decreases over the life insurance term. This is a popular option because the payout size falls in line with the amount of money that you’ll need to clear existing debts. Typically, this is the cheapest form of term insurance.

Taking out life insurance is a big decision, so it is recommended to get qualified advice before proceeding





How to reduce your monthly expenses

Many workers have lost their jobs, accepted part-time hours or been put on furlough as a result of the economic disruption caused by COVID-19. According to the Centre for Economics and Business Research, British households will see a drop in their disposable income of £515 a month – that’s £14.2bn for the country overall.

So what steps can you take to bring down your monthly outgoings? 

Review your TV subscriptions

With all major sports fixtures having been cancelled, you’re not going to be getting much out of a BT Sports or Sky Sports subscription at the moment. Investigate what options are available with your provider, such as a month’s free credit, a donation to the NHS, a different package or a temporary suspension. If you’ve been binge-watching films, check out which package between Netflix or Sky suits you best – and which has the most free extras. Remember, if you’re over 75, the charge for the TV licence, due to be implemented in June, has now been postponed to August.                                      

Look into remortgaging

The largest household bill for many people is their mortgage so reducing this can have a major impact. Bear in mind, most of the best mortgage deals are for a limited period so if you’re coming to the end of yours, or your property has gone up in value, it’s worth investigating what else is available. Remortgaging could save you a hefty chunk off your monthly expenses, especially with interest rates being so low at the moment. You may also be able to borrow at a lower loan to value (LTV) rate now, because you may own more of your property than when you took out the mortgage originally. 

Make sure you’re not just moved to your lender’s standard variable rate at the end of your current deal. You can, in fact, agree to a new rate six months before the end of the fixed-term so if your existing deal ends this summer, start taking proactive steps now. 

You may also consider contacting your lender for a three month mortgage payment holiday.  

Switch suppliers

You may well have noticed your energy bills going up as you’re spending more time at home. So this is a key area to try and save some money. Consumer watchdog, Which?, state that a household that uses an average amount of energy would save £388 per year if they switched to the cheapest deal on the market from the one at the level of the price cap. So if you’ve never switched supplier or you’ve not changed supplier in the last couple of years, you’re probably paying too much. Take the opportunity now to try one of the price comparison sites. Bear in mind though, that it’s worth digging a bit deeper than the initial list they present. 

Talk to your broadband supplier too and try and negotiate a better deal or think about switching providers to benefit from some of  the cheap introductory prices on offer. Many phone providers have also been offering free allowances so check to see if you’re entitled to any free data or minutes. 

Think about car insurance

You won’t be making as many journeys in your car. As a first step, ask your insurer to change your policy from commuter use to social use which may reduce your premiums. But Admiral, the UK’s largest insurer, has already given their customers a £25 rebate. This has prompted MPs to call on the Government to get other providers to follow suit. So while you’re talking to your insurer, ask them what they are prepared to do in these very different times.