Everyone knows that family life insurance becomes more important the moment you have children, especially since it allows parents and carers the peace of mind that comes with knowing your loved ones will be taken care of in the event that the worst should happen.
Life insurance has the potential to cover everything from schooling costs to funeral arrangements and it can be a great comfort at a very difficult time. Still, applying for life insurance is not always easy – there are so many different types of policies and it can be difficult to know exactly how much cover you need to apply for.
Before you go ahead and sign on the dotted line for your next policy, it might be helpful to take some time to find out everything you need to know to pick out the best possible policy for your circumstances.
How Does Family Life Insurance Work?
Basically, a policy holder and a company sign an agreement that requires the policy holder to pay a premium each month for the duration of the policy.
The company will then hold all these premiums and pay out to those who meet the policies requirements. The company itself keeps all the premiums that have not been paid out, which becomes the company’s profits.
Why Is It Important to be Honest with an Insurance Provider?
If you have a medical history that is going to increase the monthly premiums on your family life insurance, it can be really tempting to lie to the policy provider or to tell only half truths.
This is something you should never do as insurance companies will usually do their due diligence and if they find that you haven’t been honest, they won’t pay out, so you’ll likely have ended up paying monthly premiums for no reason at all. If you’re concerned about being approved for a policy because of a medical issue, keep in mind that there are policy providers that offer higher risk insurance policies to people.
Will the Insurance Company Ask for a Medical Check?
While not all insurance companies conduct medical checks – which is a check of your overall health and wellbeing – the majority will require some form of overview of your health to ensure that you were being honest in your application.
For those who have concerns about this, the good news is that there are still a variety of companies that will allow you to obtain a policy without a medical check-up, but it should be noted that these policies are often more expensive.
Is Life Insurance Expensive?
While life insurance might have previously been quite costly, these days it is very affordable. According to the experts, policies are actually lower now than they have been for the past 20 years and it’s quite common to come across policies for $15 or lower each month.
What’s the Simplest Way to Compare Policies?
The internet has made just about everything so much easier, including searching for family life insurance policies. All you need to do is visit a comparison website and conduct a search and you’ll be able to pick from a wide range of policies at a variety of prices.
Who Benefits from a Life Insurance Policy?
When you sign up for life insurance, the beneficiary is the one who will receive the funds in the event the policy pays out. It is important to remember that the policy owner doesn’t have to be the one on whom the policy is based – that is the insured.
The insured individual is the one whose life is insured by the policy. In some instances, beneficiaries might be one person, while in others, it might be a group of people.
Can You Use Life Insurance as an Investment Tool?
No, you should never use a family life insurance policy as an investment tool – it is purely a way for a person to manage risk, so make sure that you’re not relying on the policy to pay out.
If you’re looking for investment options, there are many more viable options for you to choose from.
How Long is a Term Life Insurance Policy?
Term life insurance policies can range between 10 and 30 years, depending on your needs. One of the biggest benefits of this sort of policy is the fact that the premiums on this sort of policy are usually fixed for the duration of the term, making it a financially appealing option.
What Happens if I Can’t Pay the Premiums?
If you can’t pay the premiums on your life insurance policy, it will lapse and the insurance provider will not pay out in the event of your death.
This means that it is very important that you consider the costs of the policy and whether or not you can maintain the costs of the premiums each month for the duration of your policy.
What is Renewable Term Insurance?
Renewable term insurance is an option or those who come to the end of a fixed term policy and want to extend this cover for whatever reason.
Keep in mind that as you would likely have taken out the insurance when you were much younger, you’ll likely end up paying higher premiums due to the fact that you’ll be much older at the point where it had to be extended.
What is a Death-In-Service Benefit?
This sort of benefit is usually offered by companies to their employees, and the policy will pay out if the individual dies in service. keep in mind that you don’t need to die at your place of work to have this policy pay out – you simply need to be employed by the company.
Furthermore, in many instances, those who are part of a company pension scheme will also be able to have their pension paid out to their beneficiary in the event of their death.