Getting Life Insurance Quotes and choosing the right life insurance policy can be a tricky process.
No two people are alike – it’s all about you and what your family and loved ones will need if the unexpected happens and you are longer around.
Having life insurance means that those close to you have time to grieve and adjust to life without you and are shielded from financial pressure.
Life Insurance Quotes: Things to Consider
When you are choosing a life insurance policy from quotes that are presented to you, one of the key things to consider is ‘how long am I going to need this policy for’?
The key reason for this question is long term affordability. The premiums for most life insurance policies increase each year as you get older (rate for age) – long term this can mean that potentially it could become unaffordable – $200,000 life insurance for a 25 year old is comparatively inexpensive but for a 60 year old it’s a totally different story.
Predictable Life Insurance Premiums
The good news is that with a bit of forethought and planning you can protect yourself long term and have certain and predicable premiums. Most life insurance companies offer ‘level’ policies as well as ‘rate for age’. A ‘level’ premium policy maintains a fixed premium over the lifetime of the policy, until you reach age 65 or 70.
Level policies cost a bit more to start out with but over the lifetime of the policy you can save tens of thousands of dollars. The younger you are when you take out a level policy the lower the premium will be and the more money you will save.
It can be hard to judge how much life insurance you are going need going forward and to make long term plans when you never can be sure what’s around the corner. That’s why we recommend taking out a bit of both types of life insurance cover – some ‘level’ and some ‘rate for age’.
Think about any long term needs that you have (e.g. leaving an inheritance for your children or a nest egg for your partner) and consider a ‘level’ policy for this with short term needs e.g. debt on a ‘rate for age’ policy. Over time as your debt decreases you can reduce the amount of life insurance that you need but still have long term cover with the ‘level’ policy.
Special Life Events
When choosing from a selection of life insurance quotes, the right life insurance policy it’s not just about the type of policy or the price. A lot of life insurance companies offer extra benefits such as the ability to increase your cover without any more underwriting (great if your health has deteriorated) with a ‘special life events’ benefit. Some examples of a ‘special event’ are getting married, buying a house or having a child.
Most life insurance policies also contain a ‘terminal illness’ benefit which means that your policy may pay out before you die, if you are diagnosed with a terminal illness. This means that you can spend time with your family, maybe do that last big trip and tidy up your affairs before you pass away. Also, you will know that your family are going to be looked after once you are gone.
Every insurance company offers different benefits, premium structures and options – it’s a lot to consider. A specialist life insurance broker can help you with deciding what’s best for you and your family.
