Know what you want before you buy to ensure a good deal at the right price.
As with all insurance life products are highly differentiated- term insurance is entirely different from investment-based whole-of-life cover. Do you also want critical illness or terminal illness cover? And are your premiums protected? Time to find a financial adviser!
With insurance life gets complicated because insurance companies want it to be complicated. They have to find a way to make their products attractive, and that’s why there are so few simple products, and so many tweaks and options on offer. Rather like going into a shop to buy a shirt and coming out with an entire wardrobe plus cleaning products, it’s easy to end up with more than you bargained for; and your first objective is to know what sort of product you want. Here are some tips.
- With life insurance life doesn’t necessarily mean life. Term policies only cover you for a set period, and are correspondingly cheaper. If you want a guaranteed payout, you probably need a whole of life policy.
- Whatever type you buy, establish what sort of payout you want. Over 90% of customers are believed to be underinsured- which rather makes the whole process pointless. Have you considered the inflationary value of your contributions?
- As well as life insurance life cover can also include critical illness cover and terminal illness cover, which allows you to enjoy the benefits of a payout before you die.
- And finally are you protected in the event of being unable to pay your premiums? Some sort of unemployment cover or premium waiver policy might be required.
Always think first- decide what you need before being blinded by the science. A good independent financial adviser will gladly assist you in finding the right type of policy.