What to think about before you buy life insurance
Mon 24 Sep 2018
Life insurance could be one of the most important financial products that you buy. If you have someone who depends on you financially, such as a partner and/or children it’s important to consider how they would cope financially without you. Having the right type of life insurance in place can give you the peace of mind that you can take care of your family should the worst happen.
Here are some things to consider before you buy:
Ask yourself why you need life insurance
Before taking out life insurance you need to consider the type of cover you need. It could be to protect your children in the event of your death or perhaps you are buying a property and want to ensure that the mortgage is paid off if you die. There are several different kinds of life insurance policy available in the market, so it’s important to review your requirements and understand what’s available before buying.
How much cover do I need?
One way to calculate this is to add up any debts that would need to be repaid (including your mortgage) as well as how much financial support your partner and/or children would need to maintain their lifestyle. Once you have done this, check with your employer to see if you have ‘death in service’ benefit which will pay out a lump sum if you die. Bear in mind that if you change your job your new employer may not offer the same level of cover, so you may want to consider arranging your own life insurance policy to ensure that you have a constant cover in place.
Joint or single cover?
Financial commitments are often linked to both incomes within the family so you may want to consider life cover for you both. Don’t assume that its best to take out a joint policy as this might not be the case. A joint policy usually only pays out once on the first death which could leave the second person without cover. If you’re unsure on this you may wish to consider speaking with an advisor.
When you complete a life insurance application form you will be asked a series of questions about your health and medical history and lifestyle. It is really important that you answer them truthfully and accurately as, if the worst happens, and you dependents need to claim on the policy, it may not pay out if you have failed to disclose your full medical history.
Review your policy
Circumstances change, a policy that you may have taken out when you are younger may no longer provide you with enough cover for a growing family. It’s important to review your policy and the cover it provides on a regular basis to make sure it continues to meet your needs.
Ask for help
If you are unsure about your options when it comes to life insurance, consider contacting an advisor who can offer advice and support.
Police Mutual offer a life insurance and protection advice service, which provides free independent advice on a range of life insurance products.
To find out more and to book an appointment call 01543 441 630 or enquire online at: www.policemutual.co.uk/life-cover/life-insurance-and-protection/
Mortgage Excellence Plc, trading as Police Mutual, is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. 03527577. Registered office: Alexandra House, Queen Street, Lichfield, Staffordshire WS13 6QS. For your security, all telephone calls are recorded and may be monitored.
Type of article: Articles
Category: Protecting my family
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