It can be kind of hard figuring out what level of cover you need when you look to buy a life insurance policy.
We’ve compiled a top list of tips to consider when buying life insurance:
1. How much cover do you need?
It’s important that you carefully consider how much life insurance cover you require. If you have a family to support there is always the risk that you take out inadequate amounts of protection.
Whilst the majority of your life assurance cover is to help in repaying the mortgage, should you pass away before it’s been paid in full, there are other debts, bills as well as your kids to consider when looking for life insurance.
2. Critical Illness Insurance Benefits
This can be a pretty useful policy to include as part of your life insurance cover – it essentially pays-out if you are diagnosed with a critical illness, such as cancer or kidney failure.
3. Single life insurance cover over joint?
Ok – this sounds a bit of a strange one – but think about it. Two single life insurance policies provides double the cover for couples – ensuring that the surviving husband or wife is left with life insurance cover. In addition – two policies don’t cost much more than one joint one.
4. Critical Illness Could Cover Your Kids
Did you know that most critical illness insurance policies will automatically include £20,000 worth of cover for your children? Unfortunately it occasionally happens that a child falls ill with a critical illness – it’s absolutely devastating for many parents but at least a life insurance policy will cover things life medical bills… giving your child the best possible chance.
5. Be Honest On Your Application
Ok – this sounds a bit odd… but, if you are looking to get life insurance you are better off being honest on your application form. Failure to give all relevant information could result in devastating consequences – for you as well as for your loved ones. Did you know that life insurance firms call this “non-disclosure” and they can use it as a reason to reject a life insurance claim?!
6. Set Your Life Insurance Policy Up As A Trust
Setting your life insurance policy as a trust means that you can ensure the policy pays-out to the loved-ones you want when you die. If you don’t then the policy is written in to your estate automatically, increasing your inheritance tax liability.
7. Finally – ensure that mortgage life insurance is included as part of your policy
Mortgage life insurance is pretty important but it’s more important to make sure that your policy is comprehensive enough to cover outstanding mortgage repayments – especially since they could be pretty hefty. So don’t fib about your mortgage – be honest and make sure your family can repay the last of the mortgage after you pass away.