If you’re planning on purchasing life insurance, there are a few things that you’ll need to take into consideration before you sign on the dotted line. There is a wide range of different policies available, provided by an equally varied selection of brokers. This means that you’ll need to keep your wits about you in order to track down the type of coverage that suits you best. Read on to find out the main things to look for when seeking out the right insurance.
The Cost
It’s important that you’re able to afford the regular premium payments for the policy you choose. We recommend that you compare a range of providers and all the fees involved in their products before making your decision. As with most other purchases, you get what you pay for – so be sensible and go for a policy that you can afford without foregoing any vital benefits.
The Payout
How will the resulting payout be calculated, and how quickly will it be awarded? It’s usually best to select a policy that is paid out in its entirety as soon as possible after your death. Usually, the more in-depth the initial application is, the quicker your policy will pay out – as very few further details will need to be processed before the cash sum can be bestowed upon the beneficiaries.
The Category
What type of life insurance policy do you need? The two main categories are term and permanent, or whole of life. Term life insurance only covers a fixed period of time and will only pay out if you die within that period, whereas a whole of life policy will – as it suggests – cover you indefinitely. The first option is cheaper and more flexible, while the latter provides greater security and can even enable you to make a profit by having your premiums invested in stocks and shares. You should also think about whether you’d benefit from applying for a policy that has been specifically tailored for those with pre-existing health conditions or particular fields of employment.
The Cash Surrender Value
What will happen if you decide to cancel? You’ll need to look at the cash surrender value of a policy before you agree to a purchase. This term usually refers to the amount that will be returned to you, minus any cancellation fees. You’ll also need to look into other matters relating to opting out or defaulting on your premiums before you invest in a particular type of coverage.
The Provider’s Track Record
You’ll need to be able to trust your provider. Do your research on each specialist you are considering by reading online reviews and case studies. Are there any particular circumstances under which they refuse to pay out? How easy are they to communicate with? How long have they been around? You don’t want to pay into a policy provided by a broker who is liable to go under, nor should you choose a provider that is notoriously resistant to approving payouts.
