Choosing a life insurance policy is one of the most important decisions you will ever need to make. There are many variables you will need to consider, and it is important to think through exactly what sort of cover you need, otherwise it could potentially turn out to be a costly mistake.
This life insurance how-to guide offers you a way to check what cover you need by asking some important questions about your requirements and will guide you on how to get the best life insurance deals.
Do you really need life insurance?
Life insurance is designed to pay out money to clear any debts such as mortgages, funeral costs, and even provide a lump sum of money to your loved ones.
If you have no dependents, and you have enough money in the bank to pay for all your debts and any funeral costs, then you probably don’t need life insurance at this point in your life.
Do you know how much life insurance cover you need?
The easiest way to answer this question is to calculate how much it would take to clear all of your debts and pay off the mortgage. You can also optionally provide some money to your nearest and dearest to make life for them a bit more comfortable, financially speaking.
Do you know what type of life insurance cover you need?
There are basically two types; level term, which provides the same amount of cover throughout the term, and decreasing term, which means that the amount paid out lowers the longer you have the policy (normally used in conjunction with mortgages).
Have you asked for multiple insurance quotes?
Never ever take out an insurance policy with the first company that provided you with a quote. Shop around and see what the best deals are to suit you – not the insurance companies! Use comparison sites online and do quotes direct with the companies that don;t come up in the comparison results as these may offer even better deals for your requirements.
Have you asked the insurance companies lots of questions?
It is vitally important that you ask the insurance companies a whole bunch of questions, such as what their policies exclude, whether there are any limitations for payout claims, what the claims procedure is, and so on.
If you don’t ask them any questions, then they make incorrect assumptions about you or your state of health for example.
What addons do the insurance policies include or exclude?
Some insurance policies have unneeded or unwanted addons already included as part of the deal. Check with the insurance companies exactly what you are paying for.
Do you need to go for a medical?
An insurance company might request that you get a medical from your doctor before they will decide whether to insure you or not. For example – a person with heart disease is going to be a significantly higher risk than a healthy person, and so they may wish to change their quote accordingly.