How To Choose The Correct Insurance Cover For You

When it comes to insurance cover, there are so many different products on the market, that it could be hard to make a decision as to which policy to choose. In this article we will be looking at some of the point you need to take into consideration when looking for insurance cover. Points such as:

• Term or whole life insurance
• Current and future income
• Number of dependents
• Your debt

These are just a few of the factors you need to consider before looking for insurance cover. Many people do not properly consider how their lives or their families may change over the years. Even though we can never know what the future holds for us we can make certain concession to cover a few possibilities. These are some what-if scenarios:

• Your have another child
• You become disabled
• You or your partner lose your jobs
• You change careers
• You want to relocate to another country

Once you have a better understanding of the first 4 points and you have gone through the ‘what if’ scenarios, you are in a better position to make a informed decision as to the life cover you need.

Term or Whole Life Insurance

One of the first decisions you need to make is deciding whether to buy term life or whole life insurance. Each has its benefits and downfalls.

Term life insurance

Term insurance is usually the more sort after type of life insurance between the two, this is mainly due to the fact that it is cheaper in price. Term life insurance is an insurance policy which is taken out for a set period of time, this time frame can be anywhere from 1 -40 years. However if the insured event does not occur within the time frame for which you are insured you lose the lump sum of all the premiums paid. You can however renew your policy when the time period has elapsed. Term insurance is riskier than whole life insurance, yet its flexibility in that it allows people to choose insurance for certain periods.

Whole life insurance

Whole life insurance cover provides cover until you cancel your insurance policy or stop paying your monthly premiums. With whole life insurance you can opt to cash in your policy if you need to money for any reason. They are more expensive but provide you with the peace of mind, knowing that the cash value of the policy will always be there.

Current income

When choosing a policy you need to choose a policy which in within your price range. Taking out an insurance policy means that you are making a commitment to pay premiums over an extended period of time. You need to make sure that the policy you choose is well within your budget.

 
Number of dependents

Take into consideration the people who depend on you now. Your spouse, children and parents need to be taken into consideration too when you take out life cover. Will they be able to survive without your income?

Your debt

How much debt do you have? Are you still paying a mortgage? You need to carefully calculate your debts, so that there is enough money to pay for this as well.

Calculate and plan as much as you can so that you can have peace of mind knowing that your loved ones will be taken care of.



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