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.
There is nothing easier than a lump sum life cover policy. Finding out about plans and different coverage amounts is tougher.
Before you apply for life insurance coverage there are some things you should know. Determine how much life insurance you really need, be careful not to take out too small of an amount. Remember to factor in all the bills including the mortgage. Online life insurance calculators are useful for getting an idea of the actual amount you need. You want to make sure you are not under-insured. Be cautious not to end up over insured either.
You have to determine the amount of time the insurance cover Many times once dependants leave or financial responsibilities are paid off the cover can come to an end. In some cases the policy holder will hold the policy until they are retired. The main thing is to have the cover stay in effect long enough for your purposes.
Be sure to answer all questions correctly when applying for life cover. Your application can be refused by the insurance company for non disclosure if you do not answer the questions.
You might want to consider placing your cover in a trust. go wrong with placing your policy in a trust. A trust will ensure that all loved ones receive their benefits. Policies that are not written in a trust become part of your estate and could increase the inheritance tax liability. You will find the simple trust form with your policy packet.
You should always compare other policy prices. The higher the risk you are considered to be the higher your policy.
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.
Always remember you can shop around for more affordable policy prices even if you already have coverage. Be sure that you are not losing any irreplaceable benefits before cancelling a policy. You have to keep in mind that if your health has or any major life changes have occurred you will be paying a more expensive rate for a new policy.
Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Life Insurance.
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