
Life insurance is a policy that you pay premiums towards during your lifetime and pays out money to your beneficiary on your death. The intention is that the money will help them to cover costs such as the mortgage or childcare when they no longer have your income to rely on. It can also be used to pay for funeral expenses, or any other unexpected costs that may arise. As such, life insurance can be a great way to ensure that your family is taken care of financially after you’ve passed away. Keep reading to get all the key details.
The different types of policy
There are a number of different policies to choose from and so your circumstances will dictate which is the one you should choose. The main varieties are as follows:
- Term life insurance – this type of policy will only pay out if you die within a certain ‘term’, or length of time. This is commonly between five and 30 years. Term life insurance can be further subdivided into three main varieties:
- Level term life insurance, which pays out the same amount regardless of how far through the specified term you die
- Decreasing term life insurance, which pays out less over time, and as such is well suited to those who wish to match it to the balance of their mortgage
- Increasing term life insurance, which pays out more over time, generally as a way to keep up with inflation
Whole life insurance – unlike term policies, a whole life insurance policy covers you throughout your life as long as you are still making the premium payments. This means that they tend to be more expensive.
Can I still get life insurance if I have a medical condition?
The short answer to this is yes, absolutely! However, you will need to do more research and shop around a bit more to find an affordable policy that you’re eligible for, which also offers good coverage. The main factor is to always be honest on your application forms, because if the insurers find out you’ve withheld information, then it could invalidate your policy and leave your dependents with nothing. So be sure to specify that you want a life insurance quote for those with Diabetes Type 1 or whatever your condition is, and see what companies can offer you.
Do I need life insurance?
This entirely depends on your personal situation. For example, if you have a large debt such as a mortgage, children, or a partner who is financially dependent on you, then taking out life insurance is a very sensible decision. It will help to ensure that your loved ones do not struggle to cope financially after your death.
On the other hand, if you’re single, have no children, or your partner has their own means of income, then it might not be so important for you. Having said that, a life insurance pay out can still be used to contribute towards funeral costs and other burdens that inevitably arise, so don’t rule it out just because no-one is financially dependent on you.
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