Tips For Choosing The Best Life Insurance For You
26 mai 2010Articol publicat in: Familie, Personal, Servicii
No one likes to think about death or how our loved ones will cope after we are gone but this is exactly what life insurance is for. It is designed to protect your family financially so they are not left wondering how they will cope on top of dealing with their grief.
People have many different reasons for taking out life insurance but usually it is to make sure that your family are able to cope without your income. It can be taken out either individually or as a joint life policy.
There are some policies that will also offer you a payout after the diagnosis of a terminal illness. There are some drawbacks however. If the term of your policy expires without the occurrence of your death then you will receive no payment. Also if you do not keep up with your payments then you can expect your policy to be cancelled and for you to receive nothing.
When you look at taking out life insurance it is important to explore all the different types of policy available to make sure that you make the right choice for you and your circumstances.
If you want a guaranteed lump sum payment on the event of your death during the policy term then level term insurance would be a good option. This is a fixed sum that will remain the same no matter how far through the policy you are. Convertible term insurance is exactly the same as this apart from with this you are able to switch to endowment or whole life insurance.
It may be that your main concern is how your family will manage to pay the mortgage. Decreasing term insurance, sometimes called mortgage protection cover, sees the sum decreasing over the policy term. It protects capital and interest repayments for a mortgage.
Renewable term insurance is a policy that can be renewed once the term has run out without the need to have a medical assessment.
If you are worried about the affect of inflation on your payout then an increasing term insurance could be the one for you. This combats the affect of inflation with an assured sum that increases each year of the term.
Another option is index linked term insurance. This offers you a payment that goes up each year alongside the retail price index.
Endowment insurance is similar to a savings scheme with life insurance built in. They are often attached to mortgages and provide a lump sum payout at the end of the term or in the event of the policyholder’s death.
Whole life insurance covers the policyholder for their entire life. Their beneficiaries will receive a payout when the policyholder dies whenever that may be. The only condition on this is that the payments are properly maintained.
All policies give you the option to add extra benefits, although they may vary. An option that may be worth considering is called family income benefit. Rather than getting a lump sum payment your family would receive regular payments over time which they may find easier to manage.
You can also choose to add critical illness cover that will provide a payout if you are diagnosed with a critical illness, a list of which will be provided in your policy. Another option is waiver of payments which protects you premium payments in the event that you lose your income due to health reasons.
Tags: life insurance