Life Insurance Tips
Life insurance or assurance is one of the oldest forms of insurance, but now comes in a variety of forms. Put simply, it is a contract between an insurance company and individual(s), where the insurance company pays out, in return for premiums paid, if the insured person dies before the end of the contract.
You can take out life insurance on your own life or the life of other individuals such as your spouse or business partner, provided you can show that you have a financial interest in them. It is also possible in these circumstances to take out a joint life policy of which there are two main types; a joint-life first-death policy which pays out on the first death of one of the lives assured.; and a joint-life last-survivor policy pays out on the death of the last of the lives assured. However, here are some important questions to answer before you put your life in someone else's hands:
- Do I need life insurance for myself or my family?
- Would it be more prudent to take out separate cover rather than a joint policy?
- Do I need term life, whole life or an endowment policy?
- Are the premiums guaranteed or reviewable?
- Does the policy include terminal illness benefit?
- Will the policy cover all of my debts?
- Do I have any cover as part of my employee benefits and for how long?
- Is my job likely to affect my future health?
- If I choose term life insurance, how long should the policy run for?
- Should I name any beneficiaries or let the insurance money be paid into my estate?
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