Buying a life insurance cover is definitely the best decision you could ever make. This is because it ensures that your dependants are not left in a financial crisis after you have passed on. With such an insurance cover, your children and spouse will get their daily provisions as usual. This means that your children’s school fees will be paid by the insurance company and they will also cater for your funeral expenses.
Besides that, the insurance provider also gives a lump sum amount of money to your family. On the other hand, buying a life policy is not easy, especially when you are not being guided by a life insurance lawyer. This is because the conditions of life insurance are a bit complex when compared with other types of insurance. Here is a list of things you need to consider when shopping for life insurance cover.
- Reputation of Insurance Company
Before you sign on the dotted line, it’s important you do some homework on the reputation of the company that you intend to buy insurance policy from. This is because there are many companies that don’t honor their promise after a client’s demise. Such an experience is very irritating because your family will be left without basic needs even when you tried your best to secure their future.
In fact, you should narrow down to a company that has a history of making immediate payments without taking the dependants of their clients in circles. You can tell if an insurance company has a good reputation by checking what their clients are saying on social media platforms. When doing your due diligence, you should never ignore complains because they are red flags. Keep in mind that insurance companies make money by not honoring majority of the claims.
- Term Life Insurance Vs. Whole Life
There are two types of life insurance; term coverage and whole life coverage. Term life insurance only offers financial protection for a specified duration of time. For instance, you can specify that you want your life insurance to remain valid for 30 years. This means that if you pass on within the policy’s validity period, the insurance company will clear the debts you leave behind, pay for your kids’ education and funeral expenses among others.
But if your demise happens after the lapse of the specified period, the insurance company will not have any financial obligation towards your dependants. The only shortcoming is that the insurance company keeps the accumulated premiums in case you outlive the specified number of years. Whole life insurance on the other hand provides financial security for an entire lifespan. It therefore doesn’t matter whether you will die at a young age or in your sunset years. The other advantage is that you can use the premiums to secure a loan from a financial institution.
- Affordability
When shopping for life insurance policy, you should factor into your purchasing power. This is because you don’t want to end up with a policy that hurts your finances in the long run. The price you pay is usually determined by the type of policy that you select. If you opt for a whole life cover, you will obviously pay more than someone that’s covered by a limited term policy. If you have a young family, a term cover is ideal for you because your children will have matured by the time it expires and will probably be in gainful employment.