Some Of The Things You Should Consider When Choosing Your Life Insurance Policy The idea behind life insurance may seem pretty straightforward; you take out a policy of say, $150,000 and in the event that you die, your family becomes the sole beneficiary of the total amount allowing them to lead comfortable lives with no financial burden. The Importance of Life Insurance A lot of people ponder on how their family and loved ones would carry on with their lives if they were to die unexpectedly, and even though no one anticipates it unless they were suffering from a life threatening illness, it would be nice to know that in a small way, you were still watching over your family. The money from your life insurance policy could be used to cover your funeral expenses, pay for your kid’s college tuition, or even settle the debts you may have left behind. A life insurance policy is a contract that you make with the insurance company of choice, where you pay a fixed amount of money (premium) to them for a limited period of time, with the promise that the insurance company will compensate your beneficiary with a tax-free lump sum of money if you were to die during the stipulated period. Types of Life Insurance Premiums vary depending on the policy holder’s age, demographic factor, and health bearing in mind that those with chain smoking habits tend to pay relatively higher premiums as compared to non-smokers. With the current economic times at hand, many people are looking for cheap life insurance policies that are not only affordable but reliable as well. There are two types of life insurance, permanent life insurance and term life insurance, where by the latter covers the policy holder for a predetermined limited period of time and is quite popular with young people due to its affordability. Different companies have different time periods with others limiting their cover to 88 years where as others have 75 years as their age limit. Permanent life insurance on the other hand has been subdivided into three namely: universal life, term to 100, and whole life with term 100 covering the policy holder until they are 100 years old. Whole life insurance provides lifetime coverage with fixed premiums for specific policies where as universal life insurance is quite flexible allowing the policy holder to decide on the amount they would like to pay for a given limited period of time. Cost of Coverage Calculate the total amount of expenses and debts owed so as to determine the cost of coverage, factoring in your family’s lifestyle costs and whether or not your spouse has another insurance policy like group insurance coverage from their employer.
Deciding the policy amount also depends on whether or not you are the sole bread winner of your family, the time period/amount left on your mortgage, and outstanding debts. If you stop making payments on your life insurance cover then not only will your coverage cease, you also stand to lose all the monies paid into the policy till that date.
Resource Having a good life insurance policy is one of the simplest ways to ensure that your family remains financially secure even after your death. You can take out life insurance in New Zealand if you are aged between 18 and 66, having realized not only what is life insurance, but also the benefits that come with it. If the policy holder dies during the term of coverage, the insurance company is liable to pay out large sums of money to the beneficiary, who then can proceed to use it to settle mortgages, pay for household bills, or to cover daily expenses. It is important to take a couple of things into consideration before you proceed to take out a life insurance policy. Looking for the right insurance policy can be compared to windowshopping, where you keep your eye out for the best coverage and insurance quotes with some companies offering really good coverage for relatively smaller premiums.