If someone in your life depends on you financially then you should have life cover. Having life cover should be your top concern. How will your family survive financially when you are gone? Just because you are here today does not promise a tomorrow. Everyone should have life cover.
A term life policy is easy to decipher and easy to get. You may need help with understanding plan types and amount of coverage.
Before you apply for life insurance coverage there are some things to consider. Determine how much life insurance coverage you need, be careful not to take out too little of an amount. Make sure you think of all the household bills including the mortgage. Your cover amount can be estimated by using an online calculator. It is a common mistake to be under-insured. Being over insured is a normal mistake many make as well.
You have to figure out the amount of time the insurance cover Many times once dependants are gone or financial responsibilities are paid off the cover can come to an end. sometimes a policy is ended when the policy holder retires. The important thing is that the policy be in place long enough to meet your needs.
Take careful consideration to answer all questions on the application accurately and with honesty. If you fail to give all the information asked of you the insurance company can deny your application due to non disclosure.
It is a safe bet to set up your cover in a trust. go wrong with putting your cover in a trust. A trust will take care of paying the loved ones after your death. Policies that are not placed in a trust become part of your estate and may increase the inheritance tax liability. You can ask your insurance agent about a trust form.
Make sure you are not paying too much for your policy. You can expect to pay more if the insurance company think of you as a higher risk.
The most common policy is the Level Term Assurance (LTA) where the sum of your insured amount remains the same for the length of the term. If you only want cover for payment of a mortgage or other decreasing debt you could check out Decreasing Term Assurance (DTA) for a more competitive rate.
You should always review your policy when any life modifications occur. The arrival of a new child, moving to a larger house or career changes could affect your policy needs. Many people do not understand that their cover needs will shift as their life does. Any time it makes sense to, change your policy.
You can always shop around for a cheaper policy, even if you already have a policy. Make sure if you cancel your policy that you are not losing any needed benefits. If your health has went downhill or there have been any other major changes since you opened your policy you might find that a new policy will be much more expensive.
Susan Reynolds is the webmaster for a leading South African Insurance Provider who specialises in Life Insurance.