How to get free life insurance

If your death would leave anyone worse off financially, whether that's your partner, children or other family members that you care for, then life insurance is a crucial safety net. It means that if you die during the term of the policy, they won't be left struggling for money.

Life insurance is a relatively cheap piece of cover, but it's actually possible to get it absolutely free.

Free cover for parents

A number of financial brands offer some life insurance free for new parents. The common thread is that the policy itself is underwritten by Aviva.

So if you buy life insurance from Asda Money, Tesco Bank or the Post Office, as well as direct from Aviva itself, then you get £10,000 worth of free life insurance cover until the child's first birthday.

Now, in the grand scheme of things £10,000 isn't a lot. When it comes to raising a child, that cash will soon disappear. And of course life insurance is more than a 12-month thing, you will need it for far longer than that. But it's still an excellent freebie.

Death in service cover

Death in service cover is offered by most employers. Generally it's a tax-free lump sum that will be paid out by your employer if you die while on the payroll. What's more, your death doesn't have to be work-related.

The sum paid out in death in service cover is normally around three to four times your annual salary, though that figure can change significantly depending on your line of work. For example, some people working in financial services get more than 4.5 times their annual salary, while others working in retail may only get around three times their wage.

Remember, your death in service cover will change when you move employer, so keep on top of exactly what your loved ones can expect to receive should you pass away.

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Getting cheap life insurance

These forms of life insurance are both very welcome and free, but they shouldn't represent the entirety of your cover. You should have some standalone cover too. Best of all, it's really not very expensive. A 30-year-old, non-smoking male can get £150,000 level cover for 30 years for just £7.45 per month from Beagle Street.

However, there are some things to keep in mind if you want to keep your life insurance costs as low as possible.

How much cover do you really need?

As with all forms of insurance, the more cover you get, the more expensive it will be. So sit down and work out just how much your loved ones would need should you die.

Do you just need money to cover the mortgage? Or do you also need money on top for things like your children's schooling costs?

There's no point getting more cover than you actually need, though equally you don't want to be too stingy and end up leaving your loved ones out of pocket when you die.

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Shop around

This goes for all financial products, not just life insurance. Shop around, compare prices and get the best deal you can. However, that doesn't mean you should automatically buy the cheapest policy. The small print will vary between insurers, so make sure you know exactly what you are signing up for.

A shorter term

Most life insurance policies only cover you for a set term, say 30 years. The shorter the term, the cheaper the policy will be.

So for example if the main reason you have life insurance is to cover the mortgage, and the mortgage only runs for another 20 years, do you really need a 30-year life insurance policy?

Decreasing cover

With a level term life insurance policy, the payout remains level (in other words, doesn't change) throughout the term of the policy. Essentially, it doesn't matter whether you die in year two or 22, the payout your loved ones get is the same.

Decreasing term insurance means the payout gets smaller over time. This tends to be popular with mortgage holders, as the payout falls in line with their outstanding mortgage balance. And what's more, decreasing cover works out cheaper than level cover.

Go for a run

With any insurance, the premium you pay is a reflection of how likely it is that you will need to make a claim. Life insurance works exactly the same way – the insurer looks at you and how likely you are to need to make a claim during the term of your policy.

Some health matters are beyond your control, and you should be completely honest with your insurer about your medical history. Tell a few lies and you will invalidate your policy altogether.

But if you can get a little healthier, whether that's dropping a few pounds or laying off the cigarettes, it will help cut the cost of your life insurance.

Get a free, no-obligation life insurance quote

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