Essential Life Insurance Questions
Do I need life insurance and if so, how much?
Whether you require life insurance will depend greatly upon your personal circumstance.
It is important not to get fooled by insurance sales people who will often call and offer a
"promotional deal" for their "valued clients". Now, do not get me wrong, if you feel you
require life insurance and a good deal presents itself, you should seriously consider it, but
do your homework before you sign up. If you are the main provider or if your dependents
rely on your income, then it is a good idea to get life insurance. As a general rule of
thumb, you should get cover for approximately ten times your annual salary. In the event
of your early demise, those funds will keep your family and loved ones financially secure
and provide for their future education, housing and other day-to-day expenses.
What type of policy should I buy?
There are many life insurance options to choose from and these choices may be
intimating to the first time buyer. The most important things to consider are your age,
lifestyle, hereditary conditions and available funds to invest in life insurance.
Whole life insurance is a more traditional life insurance policy, also known as a straight
life insurance policy. A fixed premium is paid for the duration of the insured’s life. This
policy will pay out in the event of death, contracting a dread disease, such as HIV/AIDS
or Cancer and in the event of becoming disabled in an accident.
A variable life policy has a death benefit and also an investment benefit. A cash value is
attached to your policy and you may choose to invest those funds in investment accounts.
Variables such as the exchange rate and interest rates will influence your options and
Universal life insurance is the most flexible option when choosing life insurance. You
may choose to increase or decrease your cover and premiums at any time. This option
also has a death