It’s important to be prepared for the unexpected, and one of the best ways to do that is by having life insurance. A life insurance cover ensures the financial well-being of your loved ones is catered for in case you pass on. In some cases, it comes in handy should you become incapable of earning a living either by a disease or an accident.
But before you take out a policy, there are some important questions you need to ask yourself. How much coverage do I need? What kind of policy is right for me? How do I choose an insurance provider?
By asking these questions, you can make sure that you’re getting the best possible coverage for your needs. This will give you peace of mind knowing that your loved ones will be taken care of financially if something happens to you.
Remember, life insurance is an important decision that should be made carefully. And if you take the time to do your research and ask the right questions, you can find a policy that’s perfect for you and your family.
Here are six questions to consider before taking out a life insurance policy;
Do I Need Life Insurance Cover?
Without a doubt. Wouldn’t you want your loved ones to have a good quality of life when you pass on? For many families, where one parent is the sole breadwinner, a life insurance cover is a necessity. It will ensure your family continues to enjoy the same quality of life even with your absence or inability to provide for them.
Most often, huge liabilities such as a mortgage may stretch the financial limit of the surviving partner. In such cases, a life insurance cover will be handy in reducing the financial burden of servicing such debts.
Even more important is the future of your children and the quality of education you wish for them. Taking a life insurance cover will ensure your children receive the best education even with your absence.
What is The Right Time to Buy Life Insurance Cover?
Opting into a life insurance policy is never too late or too early. Ideally, you should get a life insurance policy when you are still young. Insurance companies charge lower premiums for young applicants as compared to older applicants.
However, this doesn’t mean that if you are in your forties that it is too late to get life insurance coverage. Approach several life insurance cover providers and go with the one whose quotation is favorable to you.
How Much Cover Do I Need?
Unless you do math-related tasks for a living, this is one part of the process that is never pleasant. Even with countless guides on calculating the number of covers one needs, the process never gets easy.
Luckily, the critical illness calculator makes it a breeze. All you need to do is select your age category and fill in the sum covered. The calculator provides you with a breakdown of your expected monthly premium and payout.
The calculator arrives at these figures based on your age and sum assured up to the expected time of retirement. To some extent, the amount of cover will depend on the person’s needs including debts and children’s education.
It is critical that you consider all factors when calculating the amount of coverage you need. If unsure, reach out to your provider for clarification before making any final commitment.
How Do I Pick an Insurance Provider?
It’s not a secret that pricing is the biggest determinant when looking for an insurance provider. As important as it is, it shouldn’t be the only parameter when choosing a provider.
Not all insurance providers are the same. While all life insurance covers perform the same function, some providers have found creative ways of making their products lucrative. Scout for providers who offer extra but be wary of deals that seem too good to be true.
One of the best ways of finding a reliable life insurance provider is through referrals. Ask your family, friends and colleagues about their providers. They will help you find a suitable provider.
Will I Need to Change My Lifestyle After I Get Covered?
Many of us already know smoking affects your ratings as far as getting a life insurance policy is concerned. If you smoke or indulge in health-threatening practices, your premiums are likely to be higher.
If you start smoking after you’ve subscribed to a life cover, this may affect your premiums following a review. Any lifestyle change that threatens your well-being will likely raise the cost of your premiums.
Will My Life Insurance Have Cash Value If Canceled?
Some whole life insurance plans act as security for loans. In some cases, you can even cash in on your whole-term insurance while you are still alive. Doing this will mean the cover ceases and your loved ones will not receive any benefits in case you die. You will also receive far less benefit than your family would have at the term of the cover.
A term life insurance cover will lose cash value once canceled.
Conclusion
There are a lot of factors to consider when taking out life insurance, and it can be tricky to know what questions to ask.
We hope that our list of questions has helped you get started in the right direction. Remember, the more informed you are, the better equipped you’ll be to make the best decision for you and your family. And above all, don’t rush into anything – keep in mind both your current needs and your future goals when making your decision.