Life insurance is a topic that many of us tend to avoid. It’s a difficult subject to discuss between family members, but it is essential. Losing a loved one is heartbreaking and will devastate the world as you know it. After the grief becomes more manageable, you’ll have to adjust to a life with less income. The last thing you want to worry about in this situation is money.
As a mother, father, husband or wife, you won’t want to leave your family in any financial trouble. That’s where life insurance comes in. If the worst happens, your family will be taken care of financially. It is is one small burden that can be removed from the difficult process. Life insurance is suitable at any age. You are never too young, or too old, to take out your first policy. If you haven’t looked into life insurance yet, here’s a quick overview.
What types of life insurance are there?
There are two major options when it comes to life insurance. The first of these is ‘term life insurance’. This option will cover a certain period of time. For example, it may just cover the period it takes to pay off a mortgage. Often it involves decreasing payments as you age. As you get older, the financial burden lessens and so does your life insurance payout. On the other hand, you can opt for ‘whole life insurance’. As you can imagine, this is more expensive, but will pay out the full amount at any time of death.
Which type is right for me?
Every family is different and has different requirements. If you have young children and other dependents, a whole life insurance policy is probably best. It covers every eventuality and provides stability and peace of mind. For couples where both are working, a term life insurance policy might be more suitable.
What affects the premium?
Just like any other insurance, the cost of the premium is determined by lifestyle factors. Naturally, the younger you are, the lower the premium. Your life insurance premium will be more expensive if you have a chronic disease or illness. The premiums also increase as you get older.
How much should I pay?
This part is entirely up to you. Life insurance is intended to lessen the financial burden when you’re gone. You could opt to make sure the money will cover mortgage repayments and your total earnings. This will, of course, mean a bigger premium and will vary according to your income.
What are the alternatives?
Some life insurance policies will simply cover the cost of your funeral. This will go a long way to helping your loved ones in the wake of your passing. Some companies also offer a ‘death in service’ payout. This would cover a percentage of your income for a period of time after death.
Although it is a morbid topic, we’re sure you can understand the importance of having a policy in place. Take the time to consider what your family needs to secure the future.