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It can be a daunting task to select any type of insurance plan. There are so many choices out there with various options and it can be difficult to tell which is the best one to suit your needs. And which is the best policy for the best price of course, as there is a huge range of prices for various life insurance plans out there as well.
In a nutshell, life insurance is there in the case of your death during the term of the policy. It will pay out a tax-free payment to your family. The type of life insurance required depends on your personal circumstances. You may need cover if you have a family who relies on you for financial support, or if you have no life insurance benefits through your job or pension plan.
Life insurance is a really important one to have as it can cover your family if anything happens to you. Here are a few factors for you to consider when choosing a life insurance plan to best suit you and your family's needs. Please note that the ideas in this article are for guidance. It would be important to speak to a life insurance advisor before you make any decision.
Shop Around to Find the Best Life Insurance Coverage for You
Life insurance is a competitive business so quotes between companies and policies can vary greatly. It is definitely worth your time and effort to shop around and see what prices and plans the various providers have to offer. You can find inexpensive term life insurance offers from places like Fabric.
Shopping around is an essential part of any decision-making. So once you read on and figure out your insurance needs, keep in mind to check out the various options out there.
Figure out your Insurance Needs
Different life insurance plans offer different benefits. So the best way to start is to figure out which plan will suit your needs best. There is basic coverage and from there, you will find a lot of additional options available.
Insurance companies offer add-ons to basic life insurance coverage. They are to cover things like critical illness such as a heart attack, death from an accident or income benefits in the case of disability.
Some of the things you can take into account include:
Your contribution to the family income.
How many depends you have and their ages.
How much income would be lost upon death.
Answers to these questions should help you decide how much coverage you will need. It is best to consult an insurance agent who can help you evaluate your insurance needs and give you advice on various life insurance products.
Term vs Whole Life Insurance
There are two types of life insurance, one is term and one is whole life insurance.
Term life insurance is the simplest and cheapest form of life cover and is taken out for a set period of time. With a term life insurance policy, a lump sum is only paid if you pass away during the stated term of the policy. This is an option for parents who would like to ensure their family is protected until their youngest child is 18 for example.
Alternatively, there is Whole-of-life insurance which lasts for the duration of a person’s life. Whole-of-life insurance is more expensive than basic term life insurance as it lasts for the full life and the policy beneficiary will receive a lump sum whenever the insured party passes away. This type of insurance is most commonly associated with inheritance planning, as a way of passing wealth to your loved ones.
Determining why you are taking out life insurance will help you in deciding which type of insurance will suit your needs best.
Consider What you can Afford
It is important to take a minute and make sure you can afford the insurance coverage of your choosing. That might sound silly, but taking out a large insurance policy for your whole life, and failing to pay and thus loosing the coverage is as good as having no insurance at all. So choosing a plan that is affordable and realistic for you now and into the future is an important consideration to make.
Tell your Beneficiaries
Once you have everything sorted, you can tell your beneficiaries about the policy and give them copies of the papers. And instruct them on what to do if or when it is time for them to claim their benefit. If someone is a beneficiary of life insurance but aren't told, then their benefit could go unclaimed.
Let me know if you have any other advice in the comments!
