Millions of people all over the world choose to insure their lives, which offers them peace of mind when it comes to thinking about looking after loved ones in the event of their death.
If you’re thinking about obtaining life insurance then read on to find out all about how life insurance works and how it could benefit you and your family.
What amount of insurance should I get?
The amount of insurance needed will vary from person to person depending on things like the size of a mortgage or the number of dependants. Your own insurance policy can also need to be adjusted as your family, expenses and assets grow.
The majority of insurers will tell you that your policy should equal six to eight times the amount of your annual income but you should always discuss any policy you consider with an expert and make sure you tell them all the important details such as how many dependants you have, any sources of income you have other than your main salary, your marital status and the gross income your partner makes.
best life insurance uk policies are sold in different packages and it’s important to know the differences between each policy so you can choose one that suits your needs.
Term Life Insurance
This type of cover will insure you for a specified period of time, up to a certain age. However if your term runs out before you die your family won’t be able to make a claim. However, most people opt for term life insurance as it can be one of the cheapest ways to insure.
Whole Life Insurance
There is no time limit set on whole life insurance and your family will be able to claim whether you die at 60 or 80. If you insure with this type of policy you’ll incur higher premiums than you would with term insurance but you’ll have the peace of mind of knowing that your family will be looked after whether you die in a few years or several decades.
Choosing a Beneficiary
Your beneficiary is the person or people who will benefit from your life insurance pay out such as a child or partner. Bear in mind that your beneficiary may need to be changed over time if for instance you get divorced so make sure you change your beneficiary if necessary.
Taking a medical
Some insurers require you to take a medical and others don’t, although most will ask you to declare any major illnesses in the past and will partly base the premiums they charge on this. However, some insurance companies will not ask for a medical history or ask you to take a medical but their premiums may be higher to compensate for this.