As we get older our responsibilities multiply overnight – we start a family, buy a home and perhaps start a business.
At such a stage in our lives many of us start thinking about retirement – but what about life insurance? If not, than this would be a good time to start considering taking out a life policy. With all of these responsibilities come serious financial obligations. Life insurance should be considered a necessity for anyone with dependents – whether this is a spouse, children or an elderly parent that relies on your income for their daily living expenses. If you are the sole or primary bread-winner in your household and have any outstanding debts or serious financial commitments, than you should have a life insurance policy.
Life insurance cover isn’t as costly as you think
here are many affordable policies that will give you the peace of mind that you deserve. Simply put, life insurance is a policy that is taken out with an insurance company who will pay out a lump sum to your beneficiaries if you die or are diagnosed with a terminal illness. This lump sum of money will act as a replacement for the income that you bring in as well as cover any debts that you may have and funeral expenses. Debts that must be covered include your mortgage, car loan or credit card debt, which will be repaid in full so your family won’t have to worry about them after you’re gone. If you're not in debt, this money can be paid out as an inheritance to your children that can be used for education, to purchase their first home or car, pay for a wedding or even to start their very own business. Knowing that your children will be able to progress in their lives as if they had you there to help them through is certainly the best peace of mind a parent can have.
Quotes for 2 primary types of life insurance
The first is referred to as term life insurance and the second as whole-of-life-insurance. With term life insurance your beneficiaries will receive a lump sum payout that is predetermined in the event that you die within the period set out in the policy and, provided that your death is a result of an accident or a terminal illness. Once this period has expired your policy is canceled. This type of policy is generally cheaper and also has a range of additional benefits – from funeral expenses coverage to free financial advisory services. Whole-of-life insurance is more expensive that term-life insurance because, as the name suggests it will cover you for your entire life span and since a payout if guaranteed you’ll naturally have to pay more. Death s a result of natural causes will be covered as will death by terminal illness or accident. If you opt for this type of policy it is imperative that you keep up with the monthly premiums as failure to do so will automatically result in a cancellation of your policy.
Life insurance policy is a straight forward process
It’s important to keep a few simple, yet crucial things in mind. Firstly, you should review your policy often to ensure that it still covers everything that you need it to, to make any additions or adjustments to the beneficiaries listed and of course to update your provider with any new details and information. If you’ve just gotten married or divorced, had your first child, accumulated any serious debts or any life changing event – you must inform your provider. In addition, it’s not only policy holders who change – insurance companies and their offerings do too – if you're still on an older policy you probably won’t be entitled to any of the new products or benefits on offer. Remember to inform your family of your life insurance policy and make sure that a copy of it is attached to your will. So how much cover do you need? As previously mentioned every person will bring a different set of circumstances and needs to the table. In addition to paying off all of your debts, a life insurance policy should be able to provide your family with at least 4 years of income replacement. The insurance broker will review your individual needs and recommend an amount however, it is your responsibility to look over this to understand how the specific figure was calculated. Remember that you will have to complete medical forms which will be assessed. Once you’ve been assessed you’ll be provided with your policy terms which you can than review to decide if you’re happy with. The insurance provider will also offer you additional cover and one of the most important of these will be trauma cover that will pay out a set amount of money if you have a heart attack, stroke or are diagnosed with a terminal illness such s cancer of heart disease. Since you are much more likely to suffer a trauma than to die – adding trauma cover will increase your premiums however, this may well be worth it since you will likely be unable to continue earning an income. In addition you may be offered a premium waiver which means you're life insurance will still be in full force even if you lose your job or income and are unable to continue making the payments. If you currently rely on one source of income – it’s a good idea to include this in your policy.
Ensure that you speak with an independent insurance advisor such as one that isn’t tied to a single company as they will only be able to offer you the packages offered by their company. This will limit you greatly in your ability to find a policy that meets your specific needs. Any independent advisor or broker should be able to offer you more than one insurance option and should, at minimum have at least 5 available options. You should be aware that some independent advisors and brokers will charge you for their services while others will receive a commission from the insurance company that you end up taking up a policy with. Also remember to review more than one insurance offer – even if this means that you have to use more than one broker or advisor it may end up making all the difference in the world. You may be able to receive free cover for accidental death while your application is being processed even though this should not be a very lengthy amount of time.
