The one thing that you have to remember when taking out a life insurance policy is that it has to suit your family rather than you. This means that when choosing your policy you should consider everything that they could possibly need and every problem that they could come up against, as you need to provide them with the means of overcoming these problems when you’re no longer around.
You should never agree to the first policy that you find, make sure you shop around a little first and always remember the eight important questions that you should ask yourself about every policy you’re offered.
What do I want from the policy?
You won’t find a suitable policy that will fulfill your needs if you don’t know what you need from a policy. You should sit down with your family and explain your intentions and understand their needs. You should also consider whether you want to cover the essentials like the mortgage, and other debts or do you want to leave them with a big inheritance. You might even want to leave a donation to charity and if this is the case then this is something that you should talk to both your family and your policy maker about.
Next you should consider the types of policies that are available
You can choose between group insurance and individual insurance. A lot of companies offer group insurance to their employees as part of their benefits. This means that a small amount is taken from your wages each month and put into a life insurance policy. This type of policy only lasts as long as you are part of the ‘group’.
Individual life insurance means that you own the policy. You have to go through a medical examination before you will be allowed to take out a policy and also present a detailed record of yours and your family’s medical history. An individual policy means that you can add more benefits to your policy such as medical and dental insurance you can also remove anything that you don’t think you’ll need so the package will be completely tailored to you.
You should also think about what happens at the end of your policy.
If you take out a term life insurance policy and you out live it then you’ll have a few options. If you want to continue with the policy then your premiums will go up; you could apply for a completely new policy; you can change your policy if your circumstances have changed, i.e. your children are no longer at university and you’ve paid off the mortgage; finally, you could change to a permanent policy which means that you would carry on paying until you’re no longer here.
Finally you should consider,
- The cost of your premium
- The features of your policy
- The application process
These will all change depending on the company that you decide to take out your policy with. These are individual questions that you should ask at each meeting.