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What should I do if I can’t afford my life insurance premium?

When you take out life insurance, the premiums might not seem so much at first. However, personal circumstances can change, and you could find yourself in a place where it doesn’t seem so affordable. But what should you do if you can no longer afford to pay for your life insurance?

For those that find themselves in this situation, there are a few options available to you.

It’s important to note that with the vast majority of life insurance policies, you can stop paying at any time. This is known as ‘pure protection’ and means that you are only covered as long as you keep up your premiums. However, if you absolutely need cover, this is not a viable solution.

The first thing you could try is to find ways to reduce your monthly premiums. There are different ways you can do this.

One way is finding out if there are health-focused steps you can take that will positively impact the cost. If you smoke, for example, you might want to consider giving it up. Similarly, losing weight can help.

Once you’ve taken these steps, you will need to go for a medical where your new risk will be assessed, and hopefully, as you are less of a risk, you will need to pay less each month.

Many people choose to have life insurance to cover a particular cost, such as a mortgage. If your mortgage is close to being paid off, you might consider reducing the amount of coverage and therefore bringing your premium down. Many people also offer for decreasing cover. This means that your monthly costs slowly decrease in time, along with your overall payout. 

You may also want to reduce the term of your contract. Full life cover is generally one of the expensive types of policy and you will save money by changing it to a fixed term. Exactly what the term will be will also play into this, with a short time period most cost-effective.

Finally, you may want to consider another option. You are under no obligation to stay with your current insurer, so it should be easy to exit your current policy. There might be another provider offering a better deal, so it’s always worth having a look to see what's available to you right now.

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