Generally it’s the cheapest type of insurance available, and fortunately not claimed with the frequency of some other products, but it’s important to know the value and reasons why you should consider taking out Life Insurance to protect you and your family, along with a few facts you may not know about the most common personal risk product.
In its most basic form, life cover is paid out as a lump sum when the insured person passes away, and the amount of cover should ideally be set at a level which allows for the repayment of any debts and to provide funds to cover funeral costs (Including unveilings which we have seen overlooked in the past). But for many people, the amount chosen may also need to provide additional funds as part of a legacy for children and their families or to cover the ongoing living expenses for remaining family members. Each person’s requirements are different and there’s definitely no “one size fits all” solution when it comes to putting the right type or level of cover in place.
There are also variations between providers regarding how funds are paid out, what type of Life cover options are available (Lump sum against monthly payments, or cheaper policies covering just accidental death or funeral costs), and additional benefits. It is important to know whether your provider will make a payment on the diagnosis of a terminal illness, which may allow you to access funds earlier to be able to put your affairs in order, have a holiday or event to provide special memories or even be used to try new treatments only available overseas.
There are also options through a number of insurers to increase your cover without further underwriting under a “Special Event Benefit”. These special events are most often the same proven triggers that make us look at taking out life cover in the first place. Buying a house, having a baby and a change of employment or marital status (marriage or divorce) are the key times that we start to think about getting insurance. But making sure that the level and type of cover that you have in place is still relevant is just as important as the initial set-up. Insurer’s policies change and the product that you signed up for 10 years ago may not be the best option for your current situation.
Whatever the amount of cover or reasons you decide you need it, or the way you structure your insurance and savings plans to put your affairs in order, the important thing to remember is the reason you choose not only the actual insurance, but also the adviser who is going to take care of your family at claim time. At the end of the day the best outcome for any plan put in place is to be sure that the right money is going to go to the right people at the right time!
