When it comes time to buy life insurance, you will be faced with many choices. This is both a good and bad thing. On one side, the more options you have the easier it is to find what you are looking for. On the other side, too many choices can make it difficult to settle on exactly what is best for you.
As you begin to shop for life insurance, you are sure to have quite a few questions on your mind. It is how you answer these questions that is most important.
What are the Main Types of Life Insurance Cover?
This is one of the most basic questions to ask and answer. With regular life cover, your policy pays a lump sum upon your death or being diagnosed with a terminal illness.
Note: it is not always easy to think about your demise, however, it is essential that you are responsible enough to buy coverage when you need it.
Critical illness cover is another option offered by most life insurance companies. This policy pays a lump sum in the event that you suffer a critical illness.
What about permanently unable to work cover? If you are injured or struck with an illness and no longer able to work, you will be paid a lump sum from your insurance company.
Is Life Cover most common?
In Australia, life cover is also known as term life insurance. As noted above, this policy provides a lump sum payment should you pass away or be diagnosed with a terminal illness.
To apply for life cover, you must be between the age of 16 and 65. Along with this, it is guaranteed to be renewable up to the age of 99. With this in mind, you are able to get the coverage you need for a very long time.
How much Cover do I need?
It is one thing to say that you are going to buy a life insurance policy. It is another thing entirely to know how much life, critical illness, and permanently unable to work cover you really need. This will vary from person to person, based on your situation.
As you attempt to make a choice, you should consider the following factors:
- What can you afford to buy?
- Do you have any dependents and/or a spouse who relies on you to earn money?
- How much debt do you have? Do you have a mortgage or other loans?
- Do you currently have any other type of life cover?
Not sure of how much life insurance you need? Contact multiple companies to discuss your options and determine how much it would cost to buy different levels of cover.
As you begin to make life insurance choices, you will soon find that you are faced with multiple challenges. By answering the questions above and obtaining multiple quotes, you can soon make a decision that will benefit you and your family from a financial point of view.
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