What to Check When You Compare Life Insurance
We’re not mobsters, so we won’t ask you how much your life is worth to you. But it is something you should consider for your dependents’ sake. And when you do, you can use this guide to help you figure out what to check when comparing life insurance.
Is Life Insurance Necessary?
Life insurance guarantees that your family will be looked after financially when you’re no longer able to provide for them. Life insurance, whether permanent or temporary, lasts between a couple of years and the duration of the policyholder’s life. If you have it, you can secure your loved ones’ financial future, even if you pass away.
How Much Does it Pay Out?
Life insurance cover sometimes pays out in the event that you are unable to earn a living, but always upon death. The amount of this cover should be calculated with your insurance broker or insurer. Remember to consider your financial obligations (such as schooling and tuition for your children), the requirements of your dependents, any outstanding debts you have, and executor’s fees when determining the amount of life cover you need.
You’ll also want to check if the policy includes dread diseases and disability clauses. That is, if you are unable to earn a living as a result of becoming disabled or because of a disease, the policy will pay out.
Types of Life Cover
1. Permanent Life Insurance
This is life insurance for the duration of the policyholder’s life, and it pays out on death. A savings portion may be added to the life insurance policy. The insured can be borrow from it to, for example, pay for your child’s education. Permanent life insurance policies are not commonly offered by short-term insurance providers. And if they are, it is without the savings option.
2. Temporary Life Insurance
As the title indicates, temporary life insurance covers a shorter period of time and pays out on the death of the policyholder. Banks and lenders make it a requirement for anyone purchasing a house to take out life insurance to cover their debt. A temporary life insurance policy can be taken out for the duration of the bond to meet this obligation, for example. Temporary life insurance can also be taken out while the children are still living at home, for example.
3. Pure Life Cover
Not a savings account, pure life cover is life insurance with a short-term insurance twist. It is an insurance policy that pays out on the policyholder’s death but does not come with a savings portion. This policy pays out for accidental death as well (as opposed to natural causes).
We’ve partnered with the best names in life insurance so you’re always ‘feeling lucky’ when comparing life insurance quotes. Just fill in the form, wait for insurers to contact you, and make your choice.