Awareness of Life Insurance

Why do you need life insurance?

Life insurance is an important part of your financial planning. If your family’s only source of income is your salary, then you need life insurance coverage. If you are young, then you need more life cover that will last longer. You should take a life insurance for 10 years or 20 years depending on the age of your children. If you have no dependents then you will need less cover. A life insurance will give your family an income as long as they need it. It will take care of your loans even after your death. A life insurance could help to maintain your family’s standard of living and makes sure that your children have all the opportunities even after your death.

What is a Term Assurance?

A Term Assurance is an insurance policy taken for a fixed period of time. For eg. 10, 15, 20 years or more. You are guaranteed a fixed sum if you die within that period. No payment is made if you survive during that period.

What are the other types of insurances?

There are different types of life insurance policies.

a. Mortgage Protection: If you have mortgage on your home, Mortgage Protection will clear your mortgage when you die.

b. Specified Illness Cover: It gives you the money when you are still alive. It helps you pay your medical bills if you are out of work. So you can get better without worrying about your medical bills.

c. Whole of Life Cover: If pays you a lump sum whenever you die.

d. Over 50s No Medical Cover: Anyone above 50 can get this insurance policy. The advantage is that, no medical questions are asked. All you need to do is fill in the application and get immediate cover. For the same reason, the price of this cover is higher when compared to other policies.

e. Income Protection: Those who are self-employed should consider Income Protection. It usually pays you almost 3/4th of your annual income if you are out of work owing to illness or disability. This policy contains a deferred period, which means you have to show that you have been out of work for a minimum of 13 weeks.

What are the important points to consider before taking an insurance policy?

Check out the policy benefits or the sum assured on your death. You must decide on what type of cover you want. You will need Whole of Life Cover if you want cover that will pay whenever you die. Specified Illness Cover usually pays out 80% of the sum assured if you are diagnosed with a serious illness.

What are the details you need to give to take life insurance?

You have to fill in an application form giving details about your medical history and lifestyle. Depending on your age and the type of policy you are opting for, your insurance agent will ask you to get a medical certificate. You need to give details truthfully if you want your dependents to get compete benefits of a life insurance.

Is it possible to cancel an insurance policy?

You can cancel your insurance policy during the cooling off period – that is within 30 days of issuing the policy. You will get a full refund of any premiums paid.