Why do you need a Life Insurance?

Life Insurance is not something that can be taken for granted or be delayed. It’s understandable that nobody likes to discuss about the subject of leaving their family but this very reason calls for even more vigilance towards the topic.

So how do we proceed after deciding that we need a Life insurance?

Yes, I was indeed pointing towards the number of options available (Aviva, Legal and General, Scottish Widows, LV=, AXA, Bupa and the list goes on and on), Investing in something is easy but evaluating the options is one of the tiresome task people find repelling.

Let us discuss about this topic in a little detail and we’ll find out how to overcome the issues related to taking out an insurance policy.

What is Life Insurance?

In the simplest terms, Life Insurance is where you pay a pre-determined amount of money (called premium) over a specified period to take out a policy and a lump sum amount is paid out to your family/ dependents in case of any unforeseen circumstance during that period.

Let’s throw some light on the Advantages of taking out a Life Insurance Policy

Peace of Mind: Every time you consider purchasing a Life Insurance is because of this lingering thought in your mind “How will my family manage in case any unfortunate incident were to happen?”, This is not the most desirable thought but it does provoke you to think about ways you can financially secure your family.

Tax Benefits: Life Insurance policy unlike other incomes is not subject to the income or capital gains tax. However, it could be subject to inheritance tax in case it takes the value of your estate above the threshold limit of ￡325,000, but the inheritance tax is avoidable if the policy is written under trust which can easily be arranged by taking help from the professionals.

Customized Solutions: No two people have the same kind of lifestyle or probability of landing up the same kind of issues. Life Insurance companies have developed a lot over the time and have taken steps towards customizing the solutions for their client base. It’s possible to be insured till your last breath or taking out a policy to be covered specifically from a list of diseases.

How to Decide among the number of providers?

Given that you’ll be investing in a policy deciding the future of your family, it’s important to get the best deal for yourself. Let’s see some of the ways you can ensure you’re investing in the correct policy.

Insurance Broker: Insurance brokers are an intermediary between the insurance provider and the customer, they've got a wide knowledge of the financial product and can access the better part of insurance products in the market. Taking help from a broker is basically free of cost because they get paid by insurers via commissions. Insurance Brokers are known to do the leg work to get you the best cover according to your needs.

Comparison sites: If in case a broker does not seem like a good option, you can go for comparison sites where you can answer a few questions and the system will automatically generate best deals for you considering your answers to the questions.

Directly from the provider: The Insurance companies always have an option where you can directly purchase an insurance from them. If you have faith in a particular company, you can look up the prices and benefits they are offering, compare them with any other provider you may find competitive and request a call to understand more.

Do’s and Don’ts While considering a Life Insurance Policy

1.??????The amount of premium you pay to the company is dependent on a few factors – Your lifestyle, Age, Medical History etc. For example, If you’re a Smoker, the premium will automatically be higher than for a person who is a non-smoker, so it’s better to evaluate a few habits while taking out a policy.

2.??????Don’t lie about your medical history or any existing complications, it can most certainly nullify your policy.

3.??????Always read the documents carefully while signing them

4.??????Review your policy frequently for any better deals

5.??????Do check for some benefits like waiver of premium etc.

Life Insurance providers and brokers are an important part of the whole process but it’s important to understand that Lead generation outfits/companies plays an equally important role. Life Insurance brokers to help the providers get the legit client base needs to ensure the Leads/Data they hold, checks all the boxes in terms of quality and quantity

So, to Conclude, Life Insurance is an important commitment and needs to be examined carefully. Do your Homework before you proceed with any option in the market.