Life Insurance - Top 5 Questions Asked

 

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Term Insurance, or sometimes commonly known as Life Insurance, is a simple product that provides a lump sum benefit if the insured passes away. As simple as the product may seem, there are a number of questions that you should think through before buying a Life Insurance policy.

 

Here are the top 5 questions that we get asked about Life Insurance:

 

1) Who am I buying my Life Insurance for?

 

There is always some confusion over who the Life Insurance policy is for. Unlike other products, the people who benefit from the Life Insurance policy that you buy will be your family and loved ones.

 

Buy Life Insurance when you wish to leave a lump sum amount to your loved ones or if you wish to pay off some debts should you pass away.

 

2) How much Life Insurance should I buy?

 

If you are buying Life Insurance to support your loved ones, then you would need to think about how much money they will need to maintain the same lifestyle. Also factor in how long you think your loved ones need to be supported.

 

Don’t forget big-ticket items such as your outstanding mortgage, your children’s education as well as any other debt that would need to be paid.

 

If the benefit from the Life Insurance policy is supposed to support your spouse or elderly parents, you may also want to factor in the cost of healthcare.

 

You can use our Life Insurance Calculator to carry out a simple analysis of how much Life Insurance you should buy.

 

3) Which insurer should I buy my policy from?

 

Life Insurance is a long-term product, you would want to buy your policy from an insurer that will be there to pay the claims for as long as your policy is active. This could be 15 or 20 years from the time that you buy the policy.

 

Check that the company is in a strong financial position e.g. having a high rating by a rating agency and certainly, make sure that you are buying a policy from an insurance company licensed by a regulator that you are comfortable with.

 

4) Do I need additional Life Insurance on top of my Group Insurance?

 

In most cases, it would be advisable to buy your own insurance coverage.

 

Group Insurance provided by your company is usually limited to a fairly low multiple of your salary. This is not enough to provide for your loved ones who are financially dependent on you.

 

If you leave your job, you could be left with no insurance coverage. Even worse, you may be older at that point and may not be able to buy insurance coverage even if you wanted to.

 

5) Are the premium rates guaranteed?

 

Some Life Insurance policies do guarantee a flat premium rate throughout the policy term, while other policies may offer lower premium rates initially, but will have future premium rates increasing by age that are not guaranteed at pre-determined amounts. Note that policies with premium rates that are not guaranteed in the future may still guarantee the renewal of your policy, subject to you paying the rate that is applicable for your age at that time.

 

When comparing Life Insurance products on our website, look out for “Premium Guarantee Period” in the comparison table. The information will explain how long the rate that you see is guaranteed for during the policy.

 

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