Life Insurace Information
Unlike other insurances which can dispute various claims life insurance is a little more straight forward, you are either dead or your not! Non of us know when our time is up and if we have dependents who aren’t flush with money then life insurance is essential. Obviously if you are single with no dependents then there is no need for life insurance, the idea is if you die and you have people you leave behind who depend on you for financial need then the life insurance will fill the financial void you leave behind with a cash lump sum.
So how much should you insure for? Well that all depends. If you have a mortgage then it would be an idea to get at least the outstanding amount paid off, so whatever happens your family will have a roof over their head. Many independent financial advisors recommend twenty times your annual salary, this seems a little excessive. You need to take into consideration all financial aspects including expenses from death (funeral and legal), if you get any life cover from insurance at work, money for pensions and other investments and a whole host of other factors. Basically you need to make sure there is ample money to make people you leave behind financially safe and sound.
Whole life insurance used to very popular, which is basically insurance for the whole period of your life. This however has become very expensive. Most people now go for Fixed Term Assurance which guarantees a lump sum over a fixed period of time, usually up to 25 to 30 years period. It is best to get guaranteed term assurance rather than reviewable which the insurance company can review your policy and change the cost charged to you. You can also get decreasing polices which reduce in value over the years, this also means the premiums become cheaper too. Personally I would stick with fixed, they seem like better value. A joint policy is a good idea is you are sharing financial burden such as mortgage. The best place to search for life insurance quotes is using the internet, in an upcoming article I will list the best places to find these.