InsuranceLecturer — No one likes to think about dying which is why many people put off purchasing life insurance. It is estimated that one in three people have no life insurance coverage.
It is important however to have this coverage and in choosing the right type of coverage, you need to understand the different types of coverage that are available.
Life insurance is coverage that pays upon your death. There are major differences between the types of cover and the cost of each. Term assurance is the easiest to understand and the most straightforward. This is also typically the least expensive type of cover.
If you die while you are still within your policy term, term assurance will pay a lump sum that is determined when you purchase the cover. The term for term assurance will vary depending on your policy and typically runs from a few years to several decades.
You should note that some companies will not provide term assurance cover after a certain age. Also remember that this insurance only pays if you die within the specified term. If you take out a 10 year policy and you die after 11 years then the policy will not pay out.
Determining just how much cover you need can seem difficult. Most policies will set payout limits and many offer a bit of flexibility in these limits. You want to be certain to choose an amount that will clear any debt you have and provide for your family after your passing.
You should also review your policy regularly because your specific circumstances may change over time. If you are currently married and get divorced or if you have more children then you may want to change your policy terms or the amount of cover that you have.
The cost of your life insurance cover is going to vary based on many aspects. Men typically do not live as long as women so their policy cover may cost more. Men normally pay around 30 percent more for life insurance than women. Insurers will consider many factors when determining your cost.
They will look at the length of the term as well as the size of payout and consider your gender, age, occupation, health and other factors. Note that the European Court of Justice ruled recently that insurers are not permitted to raise premiums based on gender.
This rule has been enforced and may cause premiums for women to increase. Women’s premiums could be raised as much as 20 percent based on this ruling and men could see a decrease in their premiums by as much as 5 percent.
There are many things to consider when choosing life insurance cover and you want to ensure that you are getting the right policy for your specific needs.
Take your time, do your research and select a policy that will benefit your family upon your death. Policy terms and costs will vary by insurer so it may be necessary to speak with a few different companies before settling on one.