Useful Life Insurance Tips
Information On Life Insurance
Information On Life Insurance, Term Life Insurance, Affordable Life Insurance
First know what your needs are – Only you can understand your financial health better so do not allow anyone else to decide how much insurance cover you need. Having a rough estimate of your insurance needs can be done by adding debts, funeral cost and 6 to 1 year of your income replacement. Buying more insurance is not necessary you should just have the right amount of cover which is enough to cover you and your family.
Difference between term life and whole of life policy – Term life insurance is more appropriate for those who are looking for keyman insurance, mortgage insurance or business loan insurance for a specific period only where as a whole of life policy will cover you till the time you live. Term life insurance is also the cheapest form of insurance where there is no returns on premium and if you die within the term selected you will be paid and if you die after the term is over then you will not paid. You may also bolt on critical illness or permanent total disability cover along with a term life insurance. Whole life insurance policies have returns on premium where cash value can grow and interest is credited to the cash value. If you die, your beneficiary receives the whole lump sum.
Speak to a life insurance broker – Brokers have a tie up with most of the insurance companies which make it simple for them to provide you with comparative and competitive quotes. They are in a position to tailor make insurance policies according to your financial needs.
Insurance is for protection not to make huge profits – If you want to make quick money then invest in stock and risky indexes. Life insurance policies are for replacing income just in case you die. So do not expect your life insurance policies to make huge money over night.
Ask as many questions as possible – you have earned your money hard so don’t be afraid of asking touch or silly questions to your advisor. Think before you invest because these are long term investments.
All advisor don’t know all products 100% – Advisor mostly recommend products that pays them the highest commission which does not interest them to learn other products offering more value to the customers but less commission to the agents. Remember larger the company lesser the premium because for volume of policy holders.
Don’t surrender existing policy and buy a new one – This is the most common mistake investors make based on advisors recommendations. You can always modify your existing policy like topping up life cover and critical illness cover. You can add or remove rider benefits on your existing policy itself rather than signing of a new policy.
Life insurance or Savings plan have initial contribution period which does not mean you stop paying after that – Not all the investors know that you will have to continue paying into the plan even after initial contribution period is over because that is just the time where all the charges are deducted like marketing fee, expenses recoupment charges, asset management fee etc. Policy holders have to remain invested into the plan at least for a minimum of 6 to 10 years to bear results.
Do not buy unnecessary rider benefits – they just simply hike your premiums and benefits the agent more than the policy holder.
Most of the funds have different charges – you might suddenly see a drop in your policy value after switching because of fund charges so please make sure you read the fund fact sheets before choosing a fund.
Compare quote from different company – Make sure you obtain multiple quotes from different leading insurance companies in the region; it will help with a better understanding of premium pricing.
All insurance policies have 15 days free look period – which mean you can either make changes or cancel the policy within that period and have all you money refunded.
Keep it simple – don’t take ages to decide on which policy to take with fewer premium and more benefits. Life insurance is for family protection do not bargain and make it more complicated.
Premiums have to be paid – Make sure you pay your premiums regularly if you are undergoing financial stress you can always inform the insurance company and opt for a contribution holiday.