Understanding Life Insurance—and Getting the Best Policy

Nobody really likes getting any kind of insurance as it usually means lots of forms, lots of information. It may even mean ending up with a premium that you feel is too high for the coverage you get. But understanding life insurance is important.

When looking for life insurance, at least get an agent who represents many life insurance companies. They will have all the prices and options lined up side by side. This way you can compare.

Having life insurance is wonderful. It simply ensures that your surviving loved ones won’t be left with no financial support when you’re no longer there.

Jennifer Fitzgerald, CEO of PolicyGenius, an insurance and financial service company, says that life insurance isn’t something to delay, but she knows people do because they’ve got queries.

People ask lots of questions about life insurance so as to get the best policy. PolicyGenius tries to answer some of these questions –

  • Understanding Life Insurance – What is enough Life Insurance to care for my Family’s Needs?

Yes, R2 million may sound like a good sum of money. But will it care for your family’s needs over the next 30 years? You’ll need to take a few things into account – your dependents, your liabilities, your Understanding Life Insuranceassets, estate costs etc.

The biggest factor for life insurance is for income replacement and taking care of the loss of income to your family because of your death. Once you have life cover, look at it every year and choose a flexible policy so you can amend your cover as needed.

  • Understanding Life Insurance – Who Needs this Life Insurance?

The super rich are not likely to need it, and those who intend remaining single. If you have people who rely on you financially, you’ll need life insurance.

  • Understanding Life Insurance – Are there Different Kinds of Life Insurance?

Yes, there are, and you’ll need to know about them before choosing a Life Insurance policy. You can choose between Term Life Insurance and Whole Life Insurance.

Term Life offers cover at a fixed rate for temporary period of time. During this period, if you pass away, your beneficiaries will receive a sum of money.

Whole Life Insurance on the other hand offers coverage for life, having an investment component too. If the policy is cancelled, you’ll receive a payout, and if you pass away, your beneficiaries get the amount.

There is far more to each kind of insurance. However, for most people, term life insurance offers the coverage they need because it comes at the lowest cost.

  • Understanding Life Insurance –What factors come into Play with this Life Insurance?

Age always plays a part, and if you’re younger and healthier for instance, your life cover will be cheaper.  If you have health issues, such as being obese for instance, you’ll also pay a higher premium because of the risks involved.

Your job also plays a deciding factor, and if you’re in a dangerous profession such as being a firefighter, you’ll pay more. Lifestyle also comes into the picture and if you’re a smoker who indulges in dangerous sports such as sky-diving, your premiums will be higher.

  • Understanding Life Insurance –When should I get this Life Insurance?

Most financial experts say as soon as possible – before you need it. Most young people don’t give life insurance a thought, but life is challenging and full of uncertainties, and life insurance is always needed before things start happening that financially impact your family big time.

There are some people who take out life insurance for a new infant because they know that life insurance is connected to time and with every new year a policy becomes more expensive.

Don’t wait, as there are many life events that strike at the most unexpected times and which spur people into taking out life insurance. Certainly, if you want to provide for your family financially when you die, then you need life insurance.

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All info was correct at time of publishing