After
a certain point in life - usually after starting a family - people start
wondering about scenarios where they are no longer around, and the question of
”what will happen to my family when I’m gone?” begins.
Life
insurance is a solid and reliable way to safeguard those around us. Though
sometimes it is used to cover the debt, funeral expenses, and even to pay off a
mortgage, it is mainly used as a way to help a family after the death of the
person who was financially supporting them.
Who
can use life insurance
Basically,
if you’re single and have no kids, and your debt is fairly manageable, then you
probably don’t need it. If you have a family and sometimes you find yourself
struggling to deal with debt and family expenses, then maybe you should start looking
at life insurance options, for when something inevitable happens.
Do
employers offer life insurance?
Some
employers offer life insurance plans to their employees. It can be of great
help during difficult times, but you need to also consider what can make that
aid insufficient. For instance, if you have a mortgage or if you wish to leave
more money to your family, then extra cover may be required.
What
types of life insurances are available?
The
most common one is known as Term-Insurance and it means that the policy is only
valid for a certain amount of time.
So
if you take out a life insurance policy for 30 years, then your family are
entitled to it if you die at some point during that period of time. These
policies will have the same payout regardless if you die within the first year
or in the 29th.
Another
form of life insurance is known as Whole-of-Life and it means that it will pay
out no matter if you die 30, 8 or 50 years after. Both types can be accessed as
single or joint, meaning that you can take out life insurance along with your
partner.
Keep
in mind that whole-of-life insurances are usually more expensive than
term-insurance ones.
How
much life insurance is good insurance?
This
depends entirely on your own circumstances. Life insurance for a couple with
four kids and a big mortgage is not the same as life insurance for a couple
with one baby and a small apartment.
Experts
recommend looking for life insurance that is worth ten times your annual
income. Keep this as a reference point when you start your calculations to
determine how much life insurance you need. Remember that the internet offers
several life insurance estimators so you can have a little guidance there.
What
factors affect you qualifying for good life insurance?
It
depends on the type of policy, on the insurance company rules, the amount of
money insured and obviously how “risky” you are to the eyes of the insurance
company. This means that if you have a dangerous job, it will have an impact on
the type of insurance you are eligible for.
Age
is also a determining factor, life insurance costs are directly proportional to
age. The older you are, the more expensive life insurance will be. Your health
habits and duration of policy are also very important factors and can play a
big role in the type of insurance you can get.
Some
people opt for joint life insurance as it’s usually cheaper, just remember that
joint life insurance rules dictate that it can only be paid once - after the
first death - which means that the surviving partner will have no life
insurance afterwards.
If
you think that life insurance is the right move for you, it probably means that
you are sometimes struggling with debt which is why we strongly recommend
boosting your finances so you can pay off debt faster and before thinking about
life insurance.
A
good way to boost finances is searching for unclaimed PPI. Remember that at
some point almost everybody was charged with mis-sold PPI policies, which banks are
currently returning to their customers.
This
means that you can have the money you unnecessarily paid on those policies for
years and be claimed as tax-free money to clear a debt.
