Not me! I’m never going to die. We all like to think that we are invincible!
Well the reality is we all die eventually and some of us will leave our loved ones in dire financial straits because we didn’t think insurance was necessary.
Here are some tips when it comes to life insurance:
1. All life insurance is not created equal
Some life insurance is better than none. That’s not to say all policies are created equal. Two “similar” life policies may have very different wording. Read your policy well to avoid surprises and check what additional benefits are included in the policy.
2. Buy from a professional
When your bank suggests a customer buys life insurance, it’s a sales pitch. The teller or personal banker or mortgage manager has “performance targets” and that means selling services to you and me. Life insurance is a good money spinner for the bank. Go and see an insurance broker instead. He or she will give you the best advice and prepare a risk plan for you. Also they can sift through policies from different providers and find one most suitable for you. A good broker will also advise on issues such as who (or what because you can leave your life insurance to a trust) the money should be left to.
3. Consider the add-ons
Other policies such as permanent disability cover and critical illness cover are often sold as add-ons to life insurance. This is usually a cheaper way to buy this insurance than through the bank when you’re taking out a mortgage.
4. Life insurance is important even if you don’t work
What happens if the at-home parent becomes seriously ill, disabled, or dies? Who pays to look after the children? All too often this scenario catches a family out unawares.
5. It can happen to you
By the age of 39, four out of 100 males would have died. By 49 that’s six. For women the figures are two and four.
6. How much cover?
As a rule of thumb you should ensure the sum insured is sufficient to cover your funeral bills and mortgage as well the remaining partner’s living costs and child care as a minimum.
7. Beware of pre-existing conditions changing companies
Life insurance policies have exclusions for pre-existing conditions. That’s illnesses that you’ve got the symptoms of before you take out the insurance. This includes illnesses you may not know you have at the time of signing on the dotted line.
8.Changing Life insurance Companies
If you have an existing life insurance policy and your health has changed in the meantime you may not be covered in your new policy for an illness your old policy would have paid out on, because you now have “pre-existing illnesses”.
Finally, to steal a phrase from Nike, “just do it”. You could live (or die) to regret it if you don’t.