It’s always good to be prepared. So, heaven forbid, something happens to you (or your partner), finances should not be a worry. This is where life insurance can play an important role in giving your loved ones peace of mind. There are lots of different policies available, each of which works slightly differently. As such, it’s understandable if you’re left feeling overwhelmed by the options, and with no clue which life insurance policy to choose. It can definitely be a bit of a minefield trying to find the perfect cover for you, but the vast amount of choice also means you’re bound to find something that matches your needs. Here’s a couple of tips for buying life insurance in 2018.
- Be prepared for the topics you’re likely to discuss before speaking to a life insurance advisor.
An advisor will need lots of information from you, in order to decide what cover is best for you. As such, it’s worth preparing some answers ahead of time, so that you’re ready to for all of their questions. This will speed up the whole process and won’t leave you feeling shocked if they ask a personal question. Be prepared to answer questions about your financial history and travel plans, as well as giving details about your health and lifestyle.
- Research the different types of cover.
There are lots of different types of life insurance policies. Some run for 10 years, others for as long as 25 years – or even more. The most popular type of policy is the level term insurance, where the payout is the same regardless of when you claim. Meanwhile a decreasing term insurance will have the payout that gradually shrinks over the policy term. There’s also the option to create a joint policy with your partner, which works on a ‘first death’ basis. Before you commit to a certain company or policy, make sure to speak to an advisor in person or even fill in a questionnaire online to make sure you’re getting the best type of policy for your circumstances.
- Work out how much cover you need.
The amount of cover you need depends on your budget and your requirements. It is known as the ‘sum insured’. Most life insurance advisors will recommend getting a sum insured that is 10 times your annual salary, at the very least. However, it can also depend on other circumstances. For example, if you have a large mortgage and young children, it is advisable to have a larger sum insured than someone with no children and few mortgage repayments left.
- Find a claim that suits your financial obligations.
Do you want your life insurance to cover funeral expenses? Or perhaps your looking for a policy that will help with estate taxes. You can even ensure any outstanding debts are dealt with instead of being passed along to your estate. Conditions such as these are a great way to spare your loved ones the burden of having to consider all of these painful details. Life insurance quotes for seniors over 70 will often cover these extras. Make sure to really consider what you want from your life insurance policy, above and beyond the traditional lump sum.
- Really think about who you want your beneficiaries to be.
Putting serious thought into who you want to receive your life insurance payout is a difficult process. However, it’s something that’s necessary. After all, how many films are there where someone feels snubbed by the contents of a will? While most families may not be as dramatic as those on the big screen, there are important things to consider, like how children will not be able to receive any money from insurance companies until they are 18.
- If you have an ex-spouse, make sure their rights are clearly stated in the life insurance policy.
If you have a divorce agreement that includes child support, then it’s a really good idea to have a corresponding life insurance policy. For example, if the divorce agreement stipulates that you will be providing child support for 10 years, make sure to purchase a term policy for the same length of time. For beneficiaries, you can be named on your ex-spouse’s policy as a ‘party of interest’.
- Consider a policy with ‘living benefits’.
‘Living benefits’ have become increasingly popular over the years. They are a component of life insurance policies, which give you access to death benefit money yourself in special circumstances. This can be especially handy if you become ill and need to fund private medical care or fund daily living if you’re diagnosed with a chronic terminal illness.
- Double check that you’re able to review or amend your life insurance policy.
Some policies can last for multiple decades, while some can even provide cover until you die. As such, it’s worth getting a policy that you can alter if your circumstances change. For example, things like getting married, having children or getting a different mortgage will all impact the advised sum insured.
- Be sure you’re getting an accurate quote.
While a life insurance advisor will do their best to make the process of getting insurance as simple as can be, there is a lot of information that needs to be covered when choosing a policy. Therefore, it’s important to make sure you’re getting the best policy for you. Also, it doesn’t hurt to doubt check that there are no hidden costs or loopholes that may have a terrible impact down the line.
- Consider using a ‘free look’ period.
If you’re still not 100% sure you’ve chosen the right policy, but are keen to get life insurance in place, some companies will offer a ‘free look’ period. This will let you change or even cancel your policy after is has been issued, if you do so within a certain time frame. Make sure to check with the life insurance advisor that your policy has this period, and how long it lasts for.