8 things you should consider when buying Life Cover
Life insurance is a great way to protect your loved ones in the event of your death. It can also help pay off debts, provide for children’s education, or even fund retirement. But it’s not always easy to find the right policy at the best price.
Unless you do your homework, you could find yourself making some common mistakes when buying life cover. So to help you out, here are 8 things to look out for when applying for a life insurance policy…
1. How much life cover do I need?
How much life cover you require typically depends on your personal circumstances. For example, if you have children, you may need more life cover than if you don’t have kids. You’ll also want to think about what will happen after you die – will your partner continue working? Will they be able to afford to raise your children without financial support from you?
Here are some of the costs of your life policy can assist with:
- Living expenses
- Funeral costs
- Rent or mortgage payments
- Childcare support
- Education costs
- Unpaid loans or debt
One way to work out how much cover you need is to assess your family’s current financial situation. This includes how much of your monthly income is used to support your family, helping with various bills and expenses.
2. What Type of Policy Should I Buy?
Choosing the right type of life cover can be tricky. There are two main types of life cover available: standard life insurance (term) and permanent (whole).
Term life policies last for a set number of years, usually between 10 and 30 years. They typically offer higher levels of cover than permanent policies, but come with higher monthly premiums.
Whole life policies provide lifetime cover, paying out a lump sum, regardless of when you die. However, premiums for whole life cover are usually more expensive than for term life cover. In this case you look for a policy that best matches your budget.
Both types of policies are suitable for most situations. Term life policies, such as decreasing term cover, are ideal for covering mortgages and other large payments. Whole life insurance is better suited to those who require long-term financial protection for their families.
5. Which company is best for me?
Choosing a company to buy life cover from isn’t always easy. There are hundreds of companies offering life insurance, and it can be difficult to sort through the information to find the best option. Fortunately, there are plenty of resources online that can help you compare life insurance companies and select the best one for you.
Remember that when comparing life cover quotes, make sure you compare apples with apples. Look for a company that offers competitive rates, good customer service and clear information.
4. Can I afford to purchase life insurance?
When it comes to being life insurance cover, some people are put off by the fact that life insurance can be expensive – however, this isn’t always the case. It’s important to remember that life insurance depends on the individual needs of each person.
Furthermore, the cost of your premiums depends on a number of factors, such as:
- Age
- Health
- Occupation
- Policy type/length
- The amount of cover required
You should never pay too little or too much for life insurance. The aim is to get enough cover so that your loved ones receive adequate funds to meet any current or future financial obligations.
5. Shop around for the best deals
Once you’ve determined how much coverage you need and selected the appropriate policy, shop around for the cheapest rates. You can compare quotes from multiple companies to ensure you’re receiving the lowest possible rate. You might also want to check whether you qualify for any discounts offered by certain insurers.
6. Make sure you understand what you’re buying
It’s vital to read all of the small print before purchasing a policy. This will include details about the policy itself, including its exclusions, benefits and limitations. If you don’t fully understand what you’re signing up for, then you could end up losing money if you ever have an accident or illness.
7. Don’t forget to review your policy regularly
Your policy should be reviewed every year to ensure it remains valid. This means checking that the correct premium has been paid and that the terms and conditions remain unchanged. Reviewing your policy may also reveal additional discounts available to you.
8. Consider taking out more than one policy
If you already have life insurance in place, consider adding another policy to protect against unexpected events. For example, if you own a house, you could take out a mortgage cover to help your family cover payments if you die at any stage. You can also buy joint policies – these provide cover for both you and your spouse, eliminating the need to buy separate policies. These policies typically pay out a lump sum after the first death in the couple.
If you think you need life cover, head online today to get a quote in a matter of minutes. Whether you choose to buy cover through an independent broker or comparison service, be sure to do your homework before you commit to anything.
