Although the mention of life insurance conjures up visions of an early demise and the end of days, this insurance product is actually one of the most accessible financial products on the market. Insurers favour young, fit, and healthy applicants and can offer much lower premiums that stay low for years or even decades. Another advantage of buying life insurance earlier in life is that the chances of having a pre-existing condition are lower, which also contributes to a lower policy cost. However, premiums and benefits vary from provider to provider, so it’s worth using a life insurance comparison tool to search the market and view a broad range of providers that can meet your needs.
Types of Life Insurance
Broadly speaking, there are two types of life insurance available from the main insurance providers, namely:
- Term Life Insurance – Term life insurance policies cover a set number of years, usually 10,20 or 30 years and can be purchased up to the age of 75 (some providers may have higher age limits). Again, the younger and healthier the applicant, the lower the premium. This type of policy is useful for those who want to protect the most lucrative part of their earning years, safe in the knowledge that their family/financial dependents will be looked after in the event of their passing.
- Whole Life Cover – Whole life insurance never expires and pays a guaranteed benefit when the policyholder dies. Premiums are generally fixed and are more expensive than a comparable term life policy.
Term life insurance is the most cost-effective type of policy for most people, although whole life cover may be suitable for high net worth individuals with lifelong financial obligations.
One more type of life insurance policy is Funeral Insurance (Final Expense). These policies pay out upon the death of the policyholder and are designed to cover the cost of the funeral, caskets and remaining medical bills. This type of policy is good for people who want to remove the financial stress of a funeral from their family.
Planning Early – A Sensible and Measured Approach
No one likes to think too much about their ultimate passing, but planning ahead is a responsible aspect of financial planning that can help maintain the lifestyle of those left behind. From mortgages to rent to school fees and outstanding loan repayments, these can all be taken care of, provided the policy is robust and taken out at an early enough age.
Don’t think of life insurance as something to put off or delay; think of it as a responsible investment for the future of your family and your final gift to them. With the cost of living rising inextricably, most families would find it hard to keep afloat without the wage of the main earner and would experience a significant drop in their quality of life. For this reason, the question is not whether you can afford Life Insurance, but whether you can afford not to have it.
