Life insurance payments depend upon how much you can cover or on the possibility of anything happening to you. Despite the fact how much you are at risk you should always shop around to get the best life insurance.
Cost for a life insurance;-
How much money do you want to pay for your life insurance depends upon the cover amount which is the amount you want to be paid upon your death or on the fact that you will die in near future. Therefore the amount you will need to pay for your life insurance in form of premiums is dependent upon following things.
- Marital status
- Hobbies like extreme and adventure sports
- Smoking habits
- Medical history
- Certain professions that carry huge life risk (in which case you are likely to pay more)
The coverage amount for your life insurance policy is also dependent upon the following.
- Number of people dependent upon you
- Home pay
- Income from other sources
Insurance covers you need:-
The amount of insurance cover that you need can be calculated in following three steps.
- Adding up:-
- First you must add up your total debts including credit cards or personal loans along with any mortgages you have.
- Expenses that must be covered with insurance like child maintenance, education fees of children. Also you might want to leave lump sum for someone or for your funeral costs.
- Cover you already have:-
This step includes taking in consideration the befit package in your employment contract. If you died in service you get pay out which is a lump sum amount, multiple times that of annual salary.
- Calculating cover you actually need:-
After taking figures from previous two steps, exclude them from the amount your dependents need. This resultant amount is what you should take out from your insurance cover.
Should you link your policy with Inflation:-
If you only want to cover your mortgage, then you should not link your policy with inflation. However, if you want to maintain your current family lifestyles then link it up with inflation.
What ought to happen to monthly premiums if you are unemployed:-
For a small cost you can buy “waiver for premium” cover. This waiver allows you to cover your monthly payments in case you get gravely injured or sick and cannot continue to work. The stipulation for this waiver is that you must be in this condition for at least 6 months.
One other option is to take another type of insurance policy that will cover your outgoing in case you get sick.
Finding best quotes for insurance policy:-
For a best value you must compare different offers, you can find best insurance quotes from the following.
- Specialized brokers
- Credit card companies
- Independent financial advisors
- Private insurers
- Comparison sites for finding best offers
- Your own mortgage provider (normally they offer life insurance as soon as you get mortgage)
Asking a broker:-
If you are not confident that you can find the best level of cover or type of insurance policy that you need, it is best to look or an Insurance broker.
Theses brokers are helpful in getting you the best insurance product at best price. They do charge for their expertise and it is always best to ask the charges beforehand.
Be careful about medical history:-
Majority of insurance claims are successful but still it is important that you must provide your insurer all the right information they ask.
After claim is made, insurer look at your medical history and if you do not provide accurate information in your application thy might not pay out the claim.
Buying the policy:-
Before buying your policy, read the small print in detail to get a grasp of what you are really buying. You should be aware what is covered and what is not. If you do not understand something on the policy ask the insurer to explain it in detail.
After you have bought an insurance policy, you still have the right to have change of mind and get a full refund back in 30 days.
Keeping one’s insurance cover up-to-date:-
It is most possible that your insurance cover needs changing time and time again. Some of the common reasons for additional cover amount are as follows.
- Another child
- Partner lost his or her job
- Took a new mortgage
Similarly if you switch to a job with higher “death in Service Payout” you can decrease the amount of insurance cover.