Financial Advice- How To Choose Life Cover
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
The above mentioned points are points which you need to carefully consider before choosing insurance coverage. As each point greatly impacts the amount of insurance cover you will need. Getting a better understanding of each of these topics will help you to plan ahead more effectively. Even though the future is not revealed to us, you need to be prepared for some of the many ‘what-if’ scenarios. What if… :
? Your have another child
? You become disabled
? You or your partner lose your jobs
? You change careers
? You want to relocate to another country
Again these are just some questions you should ask yourself to get a better idea of what type of insurance cover you and your family needs.
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 cheaper of the two main types of insurance and because of this it is also usually more popular. Term life insurance is an insurance taken out for a set period, which can be anywhere from 1 -40 years. Term insurance is more flexible, yet it is also riskier. If nothing happens to you in that time frame which you have chosen you could end up losing all your premiums. You can however renew your policy when the time period has elapsed.
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. Whole life insurance cover is more expensive but provide you with the peace of mind, knowing that the cash value of the policy will always be there. Whole life insurance is a mixture of insurance and investment.
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.
Some solid calculations and considerations, will ensure that you choose insurance cover which covers your needs as well as the needs of those you love.
For more information about insurance cover visit the website http://www.alllife.co.za
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