Choosing A Life Insurance Policy

Choosing life insurance can be a daunting task. We do not always understand the different policies and sales people can be…well, sales people! Luckily, today there is a wealth of information at our fingertips via the Internet. A simple rule of thumb whenever buying any kind of insurance is this: If you do not need it, do not buy it! What you need with regards to life insurance varies from person to person and you should avoid falling for sales talk.

Unfortunately sales people can be very persistent and pressurize you into buying policies that are not needed or do not cover your personal needs. You need to be strong, ask the right questions and make the right decisions.

Whether or not you need life insurance depends on your personal situation. If you do not have any dependents or your salary is not the primary source of income for your family, you probably do not need life insurance. If however you are the primary bread-winner in the family and you earn a salary, then a good life insurance policy could be vital.

When it comes to deciding how much life cover to buy, there is no hard and fast rule. Factors such as your lifestyle, debt and dependents all play a major role. Generally though, between five and ten times your annual salary should be sufficient.

When it comes to the cost of a life insurance policy, the cheapest would probably be the policy that forms part of your employers’ group policy if your employer has such a policy in place. Ultimately, the cost will depend on you. The type of life cover you choose, family medical history, lifestyle habits and many other factors will influence cost. Smokers generally pay far more than non-smokers due to the health risks associated with smoking.

Any existing health conditions may also influence the cost of a life insurance policy and in some cases exclude you from being able to get life cover.

There are also often other costs involved such as commissions and admin fees. The person selling you the life policy is obliged by law in most countries to inform you of all costs and fees before you sign a contract.

There are so many different kinds of life insurance policies from so many different insurers that I would recommend hiring an insurance advisor to help you. You will pay this person a once-off fee and he/she will research all the different options available to you and recommend the most appropriate policy that suits your needs. Make sure though that the advisor you choose is not affiliated to any specific insurance company to ensure that you get an unbiased opinion.

In conclusion, remember to use all the resources that are available to you before you choose a life insurance policy. Tools such as the internet can save you time and money and in the long run spare you any regrets. Research all your options before making a decision and remember to consult a professional advisor.

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