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There are four aspects which need to be determined by the customer:

  • the need for life insurance
  • the amount of coverage required
  • how to comparison shop for the best buy.

The need for life insurance
Life insurance is a policy which pays an amount to the beneficiary when the insured person passes away. Although it is not obligatory, it is a very wise decision to have for anyone who is relied upon for financial support. All life insurance policies require payments to be made, which are called premiums, for a specific period of time. In return, the company promises to pay your beneficiaries a death benefit should you pass away.


The amount of coverage required
One of the costliest risks for a family is that the main earner passes away, as this will affect the spouse and/or children as they will depend on them for financial support. There are many factors to be considered when choosing the amount required, these could include:

  • current assets and current liabilities
  • earning power of surviving family members
  • other sources of income to the family
  • projected expenses and family support

The danger is that if the coverage is too little, it may not be enough to support your family when you pass away, but if it is too much, you may not enjoy a reasonable level of living whilst alive. It is therefore very important to consider these factors when regarding the level of coverage.
As well as this, when you're considering your life insurance policy, you may wish to consider its relationship with the following:

  • Mortgages: Life insurance is often taken out to protect your mortgage payments. Therefore most policies should at least cover the full amount of your mortgage loan.

If you have a repayment mortgage, you should take out decreasing term insurance where the death benefit reduces along with the mortgage. Whereas if you have an interest-only mortgage, which does not reduce over the years, you should look to take out level term insurance, as the lump sum paid out remains the same throughout the term.


How to comparison shop for the best buy
Fill in the form and we will complete a comparison survey within our system from our many life insurance companies. You will then receive a free quote from a company that is best suited to fulfilling your needs.

 

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