Guide To Life Insurance Products
Life insurance and critical illness cover provide significant peace of mind for a variety of reasons. This is particularly true if you have dependents or if you are concerned about paying for medical care in the future. However, if you are like most consumers, you may feel a bit overwhelmed when reviewing the numerous options available. Below are some facts to help you choose the best cover for your individual needs:
Understanding Your Life Insurance Options
If you die with dependents, having a life insurance policy may be the difference between your loved ones’ financial security and the possibility of them having to struggle to pay bills or a mortgage following your death. However, “life insurance” is a general phrase that refers to numerous types of cover. Therefore, it is important to choose the best policy for your specific circumstances and review more than one option before making a final decision.
Permanent (Whole) Life Insurance
Permanent life insurance, as its name implies, is cover that remains in place as long as you make your premium installments, as opposed to insurance that continues for a fixed time period and then expires. Also referred to as whole life insurance, this type of cover is somewhat costlier than term life insurance, but does not expire as is the case with term. Therefore, if you want continuous peace of mind, a permanent life insurance policy may be your best choice.
It is important to understand, however, that whole life insurance is often associated with a physical examination or a health assessment before you qualify for the policy.
Term Life Assurance
Term life assurance is sold a bit more frequently than whole life insurance and covers the insured individual for a specific period. There are various types of term life insurance from which to choose, such as a policy where the payout–as well as the premium–decreases on a yearly basis. Other options include policies that keep the same payout, but gradually become more expensive as the person ages.
Over 50 Life Insurance Plans
Over 50 policies were created for individuals 50-79 years of age. However, in many cases, such policies are also available to those who are younger than fifty.
This type of cover does not involve medical assessments or health questions, and you are not required to divulge your health history. Rather, those between the ages of 50 and 79 are offered guaranteed acceptance.
Cover of this kind is associated with a fixed premium and the policy usually expires when you reach 85 or 90 years of age. Over 50 policies almost always have a qualifying period, which is generally from one to two years. If you die during this time, the benefit amount is not paid, but your installments are returned.
Choosing the Best Policy
Considering your personal circumstances is essential when shopping for a policy. For instance, if you have a permanent dependent, such as a youngster who is disabled, whole life insurance cover is probably the most appropriate option.
If, on the other hand, you have no permanent dependents, but want to guarantee your partner is not left struggling with bills or a mortgage should you pass away, decreasing term life assurance may suffice. Carefully consider the things you want your policy to pay for should you die and if you need help, do not hesitate to talk to an adviser.
When getting life insurance quotes, it is usually helpful to tally up your mortgage and any other outstanding debt, and then give thought to how much you contribute to these bills. Ideally, your goal should be to match that amount, particularly while your children are dependent.
However, the higher the coverage amount, the more expensive the premium, and therefore it is essential to factor in affordability when getting life insurance quotes.
Choosing Between Joint and Single Cover
Couples must give thought to whether they want two single policies or a joint life insurance policy. Even though joint cover is typically less expensive than the cost of two separate policies, it only pays out once. This means if one partner dies, the insurance ends for the other.
For this reason, you must consider whether such a policy would sufficiently cover your family, or if paying a bit more for two separate policies is the wiser choice. When making this decision, never underestimate the contribution of a stay-at-home parent: should that person die, the remaining partner may have to pay for child care, a housekeeper, or any other service for which the stay-at-home parent was responsible.
Medical Insurance Cover
Medical insurance cover pays for surgeries, tests, and in most cases, private medical treatment, if you become injured or ill during the policy’s term. Policies of this type were designed for acute health disorders and cover extra treatment in addition to the services provided by the NHS. For instance, appointments with your general practitioner are still covered through the NHS, but with medical insurance cover you could also qualify for the following:
- Faster treatment
- Choice of facilities
- A private room
- A broader range of drug choices and treatment options
Critical Illness Cover
Critical illness cover pays out if you develop a medical condition or injury, according to the terms of the policy. Critical illnesses covered under such a policy may include specific types and stages of cancer, heart attack, stroke and certain injuries.
Most plans of this kind pay out a lump sum if you are diagnosed with a disease or condition as defined under the terms of the policy. Critical illness cover, however, should not be confused with permanent life insurance or term life assurance, as it is a completely different product.
Getting Multiple Life Insurance Quotes
It is a good idea to obtain a variety of life insurance quotes prior to finalising your decision, as this is the easiest way to make sure you choose the best policy for your needs. Ultimately, purchasing insurance can ease money worries in the event of illness or death, and therefore is a wise investment for most individuals.