What is Life Insurance?
Life insurance is a contract between the policy owner and the insurer, in which the insurer agrees to pay an amount of money in the event of the owner?s death. The owner pays premiums in exchange for this insurance.
Do you need Life Insurance?
Your most valuable worldly asset is your potential to make money. Your household cannot run without your income, and therefore you must protect it and start planning for the future with a life insurance policy.
What are the types of Life Insurance Cover?
? Term Life Insurance: benefits only payable on death, it does not build cash value, and coverage lasts for only a set period of time (5-20 years).
? Permanent Life Insurance: builds cash value, coverage lasts for entire life of the insured, and payments can be made for only a set period of time or over the entire life of the insured.
? Whole Life Insurance/Ordinary Life Insurance: similar to permanent life insurance, but requiring premium payments to be made over the entire life of the insured.
? Universal Life Insurance: builds cash value, death benefits are adjustable, and premium payments are flexible.
How much cover does one need?
Life insurance coverage is typically linked to the value of a mortgage to help protect immediate family members and other dependents from financial hardship. However, the value may be set for a higher amount to provide additional funds to cover on-going living expenses or other liabilities like loans (provided that these are not already covered by existing insurance). However, most people with life insurance do not have sufficient cover.
Shop around to get the best deal
After considering what type of life insurance and how much you want to buy, you can begin shopping. By letting licensed companies vie for your business, you will end up with the lowest price quote.
The price and parameters of life insurance policies vary greatly between companies, making it extremely important to choose from a significant pool of possible insurers. Make sure to research the proposed policies, asking lots of questions.