Life Insurance

Life Insurance 101

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Life Insurance 101


Before you choose your life insurance policy read the following, it will help you to make the right decision

• Life insurance plans are beneficial to everyone however these plans are especially beneficial to people who earn more than $20,000 annually and have children or dependants in the family. Life insurance are also suitable for buyers who have one or more serious pre existing conditions or fatal genetic problems.

• The only type of life cover plan currently offered to new buyers in Australia is the term life cover plan that protects the policy holder for a selected number of years. Buyers have the freedom to choose the tenure of the plan and the insurance amount. Buyers can get themselves insured for up to $2 million however some insurance companies allow older buyers to insure themselves for $1 million or lesser.

• Buyers who are interested in buying long term policies or are buying insurance plans because they are in between jobs should remember that it is always better to opt for an insurance amount that is greater than 10 times the annual salary since this will ensure that all of the buyer’s family financial needs are met in the case of an unfortunate situation.

• Life cover plans are beneficial plans that allow buyers to protect their family’s financial future however, these plans have some restrictions. For instance, life cover plans do not cover people if they have missed 1 premium payment or if they have died out of the policy period. Due to this reason, buyers should remember to make premium payments on time and choose a long term plan as far as possible. To make things easier for consumers, insurance companies offer two types of premium plans that are stepped premiums and levelled premiums. Buyers are also given an option to pay premiums either fortnightly, monthly or annually. Consumers should note that better plans are flexible and such plans give buyers more freedom to choose features.

• Many life insurance companies offer package deals of life insurance plans with other plans such as funeral insurance and trauma insurance. Funeral insurance ensures that the deceased person’s family doesn’t have to pay for the funeral costs from their own pocket and trauma insurance ensures that policy holders receive a lump sum amount when they are struck with problems such as stroke or heart diseases. Most insurance companies offer discounts, promotional deals and other offers when people opt for 2 or more insurance policies from the same insurance provider or broker.


   




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