We, as fellow human beings, understand that death is not a subject anyone likes to think about. But you need to be prepared. Think of your family. Think of those you are leaving behind and what might befall them without the financial stability you currently provide for them. Understanding Life Insurance is a must.
Thinking is the first, and worst, stage of this process, we promise. Now that you’ve considered the worst you can make plans so it will never happen. You’ll want to know exactly what you can do, so we’ve compiled the different types of Life Insurance below.
Depending on your requirements, there is a huge variety of intimidating life insurance policies available, but calm down, don’t worry, we’ve simplified Life Insurance so it falls into one of two categories – Term Assurance, or Whole of Life Insurance.
The first of these, Term Assurance, is where insurance cover is provided for a fixed period of time only.
An example of this might be Decreasing Term Insurance, where your mortgage repayments are covered over the period of time that your mortgage is in effect.
Or maybe Level Term Assurance is right for you, where the period of cover is set anywhere from five to forty years, and a lump sum is made payable in the unfortunate case of your death, if it occurs during the covered period. This could be useful in your immediate future after bereavement to cover expenses where your wage has been lost. This means that, if you were of the older generation, you can buy insurance for a set number of years instead of getting insurance for the whole of your life, which is generally more expensive.
The other form of Term Assurance that could be right for you is a Family Benefit Plan – which is similar to level term. Instead of a lump sum, you can be sure that a regular payment is made to your family from the time a claim is made to the time you specify for the funds to stop. This means you can be sure the money you leave behind is spread out and the money isn’t used up too quickly, which would leave an uncertain future for your kids or partner.
A “Whole of Life” policy is just that – insurance cover for the rest of your life, and may it be a long life at that!
The cost of any Life Insurance policy is dependent on a number of factors – your age, location, occupation, the length of policy you want, and how much you wishes to be covered for. But don’t fret; when you go through this process with Active Brokers we can guide you through every step of the way, no insurance jargon. Factors that could be relevant to the price of your insurance can include any dangerous sports or hobbies that you participate in. Other things that can affect the cost of your policy are any health issues – for instance, are you a smoker? Do you have any pre-existing medical conditions? Hopefully you don’t, but it’s very important that you are honest. Honesty is the best policy, and without your honesty when applying, your family could be denied any claim if you passed away because the policy would be invalid.
So there you have it. Life Insurance. That wasn’t so hard, was it? Now you only have to call up Active Brokers to get a quote for your Life Insurance and everything will be sorted.
Have a look through our other blog posts for more advice and simple explanations on some of the seemingly difficult aspects of insurance. Understanding Life Insurance really isn’t so hard when you learn from the experts.