If you are a family man, you probably know what a life cover policy means. For instance, when you are planning your wedding or your honeymoon, or just making sure your children have the best of everything, then you will want to consider life assurance. Life insurance can give you peace of mind and protection in case something happens to you, so it is a must for most couples. So, what is life cover?
Term life cover policy – like the title implies – is a life cover policy which run for an agreed period of time, usually for a term of five years, and then the cover is ended. Joint life insurance also is a life cover policy which is in force for the whole of one’s life, and is usually of longer duration than that of whole life insurance. A number of people consider whole life insurance as the best type of life assurance because it provides an individual with a large sum of money that is guaranteed to be paid out upon the death of the insured person.
With regards to taking out life assurance, you must understand that there are two different types of policies that you can choose from with regard to covering your dependents. There are ‘taxable’ and ‘non-taxable’ policies. The former covers all your dependents, while the latter does not. The former is called tax-free, while the latter is called tax-deductible. In addition to the two main types of insuring your dependents, there are also policies which provide you with both a savings component and a death benefit.
You can insure your dependent’s life, either alone or with their income, by taking out a single life cover policy, or a double life cover policy. The former provides you with sums of money at your disposal, both in fixed and variable premiums. You can use the money to help you cover your daily living expenses or for any other reason which you think pertinent. Whatever you do, however, make sure that whatever sum you receive is fully recovered by the time of your death.
When it comes to saving money on the cost of your life assurance, you should always seek advice from the relevant life insurance advisors. In order to get a competitive rate, you need to compare the rates offered by various life insurance companies and find the most suitable one. Your life cover premiums are calculated by the age at which you were insured, as well as the earnings bracket in which you are found. Therefore, if you are young and fit, you will obviously have a lower premium than someone who is middle aged and overweight.
One of the best ways to keep your premiums low is to never let them go beyond your means. Never, ever, sign up for an expensive life insurance policies because this only attracts higher premiums. Instead, save up the money and pay a little extra every month. By doing so, you will not only be able to cover your family financially but also make sure that your family is taken care of in case of your death.
Once you reach the age of 50, you will experience decreasing term life insurance policies. As a general rule, the premium of decreasing term life policies is lower than the one for whole life policies. The main reason behind this is that you are assured of a fixed premium for only a fixed period of time. If you are very lucky, then you might find yourself paying as little as ten percent of what you would have paid before you reached fifty. However, keep in mind that this ten percent premium will only be able to absorb a fixed amount.
There are various other options available for people who wish to obtain life cover at a cheaper price. One option is to get a joint or one person life cover policy. For instance, if the insured person is married, then a joint group life assurance policy can be considered. This means that the premium you will have to pay will be spread across two people. You may also choose to get a sum assured life assurance policy. This gives you the freedom to decide how much sum you want to pay as premium each year and hence how much assurance you want to receive.