What is life insurance for?
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Have you seen how much life insurance can cost?
It can really hit you in your pocket when the prices of food and other necessities of life are also rising.
Can you do without it?
If you are entirely alone with no dependents to provide for when you die, there is no need for an insurance policy.
But if you will leave someone behind who will struggle for money without your income, a policy is a good idea. The plan is to replace your lost income. A good rule of thumb is to multiply your net annual income by five or more. This gives your family and children at least five years to make alternative financial arrangements. Alternatively, you can look at your current mortgage and other liabilities, and carry enough insurance to pay them all off and leave a little over. How you do the sums is entirely up to you. But bear in mind that prices keep going up and debts get bigger. If you do not build in generous margins to allow for inflation, you may penalize your dependents. It is better to pay a little more in premiums now to give your dependents enough to live on without having to struggle.
What kind of cover is available?
There are two basic kinds of policy:
- 1) term life insures you against death for a specific period of time — you can pick any number of years, say, until your children have finished their education, or until you retire. This is a very simple contract. If you die, the insurance company pays out. If you do not die, you get nothing; and
- 2) whole life insures you until death (assuming you pay the premiums, of course). The advantage is that the policy provides an investment option which either pays interest or is linked to the performance of stocks and bonds.
Term life policies are cheaper. If you have a young family on a tight budget, this may be your best choice in the short term until you build up a little slack in your budget. But whole life provides a better return over time assuming that the interest rates are reasonable and/or the related investments prosper. You should consult an independent agent to work out which is better for you given your family circumstances.
Whatever you choose, read the policies carefully. Some policies are cheap because they only insure you against a very limited number of risks. Such policies are usually a false economy. Paying a little more to get cover against all risks gives your family the protection they need. But you should also recognize the need to review your lifestyle. Premium increase dramatically if you are a smoker or play dangerous sports. The more risks you take with your health, the higher the premiums.
What service do we offer?
Through us you can get free quotes for life insurance from multiple insurance companies. This is a quick free service. Just fill in some basic details about yourself and you can get instant term life quotes. All the insurers use the same information, so you are comparing like-for-like quotes. Just pick the one that gives you the best value for money and buy today.
We are available 24/7 to give you the maximum convenience whether you are at home or at the office. Instead of you having to telephone round all the major insurers or find a reliable independent agent, we offer you an immediate choice between low-cost policies from the best companies in the insurance business. You cannot lose by giving us a try.
