What is the best type of life insurance to have?
Life insurance policies are incredibly complicated and like most insurance policies, the cost of the insurance will depend on your individual circumstances. For this reason it is almost impossible to say which the best type of life insurance policy actually is We all have different requirements and different amounts of money, therefore every policy is probably suitable for somebody out there but no one policy is suitable for us all. When choosing a life insurance policy it is important to remember why it is that you are thinking about taking out the policy in the first place Ė presumably this is to protect the futures of your family, and for the majority of people this is priceless.
There are many things that determine which life insurance policy is the best one for your needs. The two most important figures that you must calculate first of all are how much you can afford to spend on your life insurance on a monthly basis and how much would you like to leave for your beneficiaries once you die. If you can afford it, a whole life insurance is probably a better bet as there is no chance of you losing the money that you invest providing that (a) you choose a solid and reliable life insurance company that doesnít go into liquidation, and (b) that you keep up to date with your life insurance premiums.
Essentially there are two main types of life insurance. Whole life insurance is a policy which lasts until you die, therefore a life insurance pay out is assured, however this can be very expensive in the long run. A term life insurance policy is invariably cheaper but if your beneficiaries are to receive a pay out then you must die within the term of your insurance policy. If you outlive it you will not receive anything.
If you have a mortgage with a high outstanding balance you might like to chose a life insurance policy with a mortgage protection element. This will ensure that the balance of your mortgage is paid off upon your death, meaning that your family will not lose the family home. If you are the sole breadwinner of your household your family could be left in a difficult position if you die. How might they afford the mortgage repayments?
The cost of life insurance can vary enormously Ė sometimes by as much as 50% for a policy offering the same coverage. For this reason it is absolutely critical that you shop around in order to find the best quotes. Haggle with agents, but be prepared for a fight and only commit to a deal when you know that you canít get it anywhere else for a better price. Although a policy might offer everything that you need it wonít be the best policy to choose if you havenít got it at the best price. Sometimes going to a broker can even save you money as they might be willing to pass some of the commission that they receive on to you in an attempt to persuade you to do business with them. This could save you a great deal of money and is something that is certainly worth considering.
Disclaimer: The information contained on this page is not intended, nor should it be construed as providing any form of financial advice or guidance as to which insurance product/policy is right for you. If you are unsure as to which product meets your requirements/needs you should always seek advice from an Insurance Professional.