Finding the Right Type of Life Insurance

Shopping for life insurance is one of the most important tasks you will ever take on. As is the case with other major purchases, ending up with the right product can depend on whether or not you asked the right questions. The following is a discussion of the kinds of questions you will want to answer in order to make a sound decision about life insurance.

Why Should I Purchase Life Insurance?

Crisis is not likely to be at the top of the long list of things you have to think about every day. Chances are you may live a long and prosperous life, but it would be unwise to ignore the fact that unpleasant events can and do happen. Purchasing life insurance is the obvious choice when you want protection for life’s unexpected twists. Reasons for purchasing life insurance include:

o You have debt
o You have a spouse who depends on you
o You have elderly parents who depend on you
o You have children who depend on you
o Your income helps keep the household running
o You have a mortgage

How Much Life Insurance Do I need?

Answering this question will depend on your circumstances. Take the time to make a list of needs that might have to be met if you were to die tomorrow. Some suggestions for this list are:

o Current bills
o Costs for Funeral or memorial services and burial
o Car payments
o The mortgage or rent
o School fees
o Credit card payments
o Hiring help to take care of the children
o The household having to make do without your income

Is Life Insurance Any Good To Me While I am Living?

Life insurance can be very beneficial throughout all of life. There are various life insurance products that offer assistance to you in times of need such as:

o Total and Permanent Disability – provides a lump sum payment in the event that you become completely disabled. The pay out can be enough to replace your income for years. It could also cover extra expenses for things like equipment, nursing staff and home modifications to accommodate your special needs.
o Income Protection – this cover would be beneficial if you were to have to be out of work for a few months because of a back injury or pneumonia. You could receive up to 75% of your income.
o Trauma Cover – Stroke, severe injury, or cancer could leave your household in financial chaos. Recovery could take years. Trauma protection provides a lump sum payment that can cover living expenses and additional costs for an extended period of time.

What are My Life Insurance Choices?

Life insurance comes in many shapes and sizes. You will need to fully examine all of the options in order to select the one that best suits your needs. These could include:

o Stepped premiums – start out very low and gradually increase over the life of the policy
o Level premiums – stay the same throughout the life insurance term
o Decreasing premiums – to cover a mortgage, the premium and benefit amount can be decreased as the amount left to pay on the mortgage decreases
o Short term policies – cover for one, five or ten years
o Long term policies – cover for up to thirty years
o Renewable term policies – cover that can be renewed for another term after confirmation of good health, and usually for a higher premium

Is Life Insurance Worth the Expense?

In the event that something traumatic was to happen to you, you would not want to have the additional burden of a financial crisis. If you were suddenly injured and unable to work, you would have many expenses in addition to the every day cost of living. In the worst case scenario, you would not want your loved ones to be left struggling to make it. Life insurance products can be purchased relatively cheaply and combination packages often make it possible to be protected against a number of tragic events. A qualified advisor can help you make what could be your best decision ever.