Buying life insurance can be a long and difficult process.
Don’t let all the choices get the best of you and prevent you from deciding against something that is totally worth it.
We know its not the most straightforward process in the world, so that why we’re taking a little step towards making sure it’s not a complete nightmare.
we have a detailed explanation for you on what questions to ask when buying the life insurance.
This post is here to help you decide what to look out for when it comes to choosing life insurance.
What Type of Life Insurance should I buy?
Term life or whole life; believe it or not, there is a difference.
Purchasing life insurance will pay out a tax-free lump sum to your beneficiary if you die during the policy term.
Term life insurance premiums tend to be pretty low and is one of the simpler types of life insurance. However, if you pass after the policy term set, you will not receive any payout.
Whole life insurance, on the other hand, is not so fixed. You’re covered for your entire life essentially with life assurance.
With this type of cover, however, as you might have already guessed, premiums tend to be much higher.
Payment is made at the end of the policy when the policyholder dies.
Make sure that when you are deciding on life insurance, you consider these options and take into account your individual needs and circumstances.
What about mortgage Protection Insurance?
Mortgage protection insurance comes in many forms; reducing term cover, level term policy, life insurance policy and serious illness.
Mortgage protection is a basic type of insurance policy that is usually payable directly to the lender.
This type of cover is often to protect the bank in the event of the insured person’s death.
You can use an existing life insurance policy for mortgage protection, as in the case of a Mortgage Protection Life Insurance policy.
However, this policy must not already be pledged to another loan and the amount that you are being insured for should be, at the very least, equal to the value of your mortgage.
You can use an existing life insurance policy in this way by assigning your policy to your lender. However, there are some steps to be taken to switch life insurance assigned to a mortgage lender to, assigning your policy to another beneficiary.
For more information on switching life insurance click here.
What are cancellation terms for Life Insurance?
You should review the cancellation terms and conditions carefully for your own benefit.
You can usually cancel life insurance up to 30 days into the policy issue date.
With this cancellation, you should receive a refund of any amount of premiums you paid into your policy. However, it is important to note that this might also mean a significant increase in the cost of insurance policies at a future date.
Outside of the cooling-off period, you can still cancel your policy at no extra costs to you depending on the terms of your policy.
However, after the cooling-off period, you are generally not entitled to any refund of premiums paid into your policy.
Does it include Series Illness Cover?
Consider getting a comprehensive life insurance policy that includes serious illness cover or a serious illness ad on.
Critical illness cover is mostly an added benefit to life insurance policies.
The average policy can pay out a range of 30 to 40 ailments. In contrast, a more comprehensive plan will include more than 150 illnesses.
Life insurance that is comprehensive, ensures that you are covered for critical illness, death and disability, whereas some insurance policies may not cover you for one or a few of these incidents.
This type of cover is quite expensive (as you might expect) but, it is totally something to work towards if need be.
Does it Include Convertable Features?
Look out for a conversion feature on your policy or convertible term insurance.
Convertible term insurance has the supplementary benefit of a conversion option for the policyholder.
This option allows you to convert to a new policy for an extended period of time.
The great thing about having a conversion feature on your policy is that, you can skip all the unnecessary drama.
You do not need to have a medical exam all over again or give further evidence of good health when you have a conversion feature.
See here under ‘Extra Benefits’ for more information.
What are other Policy type Options?
Some other policies types to look out for are the joint life and dual life policies that are available.
Joint life insurance policies are the insurance policies that cover couples in the case of either of the partners passing away.
It’s important for either partner to have insurance as each makes an equal contribution to a household. With a joint-life policy, the pay-out is provided on the first death.
Make sure to read up on this type of policy as there is little flexibility with separations or divorces.
Dual life policies are similar to joint life policies.
However, with dual life policies the policy can continue despite one partner passing. Unlike joint life policies, with dual life policies a claim can be paid on both deaths.
Does it has accelerated benefits Clause?
Some insurance policies can offer you (the policyholder) benefits whilst you are alive.
These types of policies may have an accelerated benefits clause. Life insurance doesn’t just have to be for your beneficiary, and it definitely doesn’t have to be for after you have passed.
A lot of new policies will allow the option of receiving payments for emergency care or chronic illness.
Look for companies that have this option before you even require it, just as a pre-emptive measure.
Not only do some companies offer the option of dipping into premiums for emergencies, but some companies also give policyholders a 20+ year window to get all of your premium paid into your policy.
Does it allow automatic payments?
Look for a policy that allows you to make automatic payments towards your life insurance policy.
Sometimes remembering is a lot harder than it appears to be, even when it’s a matter of major importance.
So why not avoid the burden of remembering almost entirely and opt for a life insurance policy that allows payments to be made automatically. You can enrol in a programme that withdraws payments directly each month.
Compare Life Insurance for a better deal
Use a comparison tool like the one on our website! The best thing about using a comparison tool is that it does almost all the work for you.
Ucompare’s easy to use and understand mechanism will give you a variety of insurance policies directly suited to your needs.
Using an unbiased tool like ours, allows you to see all that an insurance policy offers and select based on what you see right in front of you.