What you should know before purchasing life insurance

If you are concerned about leaving enough money for your family, you could consider life insurance.

07:16 05 September 2013

When you hear insurance, you might think of life insurance and how it could help your family if something were to happen to you. You might not really need life insurance, especially if your employer already has a service, often termed “death in service”, that will provide funds for your family. Here are a few reasons you might want to get life insurance:

• The amount offered by your employer is not enough to cover the living expenses or care expenses for your family if something were to happen to you.

 

• Your employer does not offer a type of life insurance option, or you are concerned that something might happen to you if you had to quit, or were let go.

 

• You want your family to receive a lump sum, or regular monthly payments after you die.

What you should know about life insurance before you purchase a policy:

• You’ll most likely get better rates when you sign up for a policy when you are younger. The company can then acquire payments over a longer period of time and therefore you won’t need to pay as much in order to obtain a decent amount of cover.

 

• Life insurance is not the same as disability and will only pay out upon death. There may be other plans available which allow you to borrow against the value, but it takes away from the amount to be given to your family or it needs to be paid back.

 

• If you have certain pre-existing medical conditions you may not qualify for life insurance, or you may be faced with a much higher rate. You may also need a medical examination in order to qualify. If this is the case, you may be able to get alternative options that can offer similar benefits to your family.