If you have anyone in your life that rely on you financially then you will want to have proper life insurance coverage. Life insurance should be your number one priority. How will your family support themselves when you are gone? The harsh reality is that you never know what could happen Life insurance is something we all should have.
The lump sum policies are a cinch to obtain. Finding the right plan options with the highest amount of coverage is the tricky part.
There are some things you should consider before applying for life insurance coverage. Make sure you have taken out a high enough amount, it is easy to take out too little. Dont forget to factor in all the bills. If you need assistance determining how much coverage to purchase use an online life cover calculator. It is a common mistake to be under-insured. Over insuring yourself is a mistake as well.
You have to determine the length of time the will be in place. Under normal situations a cover should remain in effect until children have moved from the home and all debts has been paid. Some people will end a policy after they retire. The main thing is to have the policy stay in effect long enough for your purposes.
Take careful consideration to answer all questions on the application accurately and with honesty. Being dishonest on your application or not answering all the questions asked could lead to a refusal due to non disclosure.
It is a safe bet to put your policy in a trust. go wrong with putting your policy in a trust. All benefits is paid to your loved ones by the trust after you have died. The inheritance tax liability will be higher when the policy becomes part of your estate, a trust stops this from happening.The trust form is simple to fill out and will be included with your policy.
Do not pay more for your policy than you can afford to. The higher the risk you are considered to be the higher your policy.
One of the more popular policies is the Level Term Assurance (LTA) this means your policy amount will remain the same throughout the length of the coverage. If you only need cover for payment of a mortgage or other decreasing debt you could look into Decreasing Term Assurance (DTA) for a more competitive rate.
If you have any life altering event you are recommended to check your policy to ensure you have the right coverage amount. Your policy needs change as your life does so review your coverage if you have any life changes like a new baby or change of jobs. Many forget that their policy may need modified to keep up with their life. Do not be afraid to make policy changes as they are needed.
Even if you already have a life cover policy you can shop around for a more affordable one. Make sure if you cancel your policy that you are not losing any needed benefits. A new policy could be higher is you have had any major health problems or other life changing situations.
Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Life Insurance Policies.