Before you get life insurance, talk through these 6 questions with your financial adviser. That way you'll have a clear picture of what you're buying.
1. What types of cover do I need?
Deciding what you need to be covered for is important. You can start by asking yourself (and your adviser, of course): Can I do without any of these types of insurance?
2. How much cover do I need?
When it comes to life insurance, everyone’s needs are different. Working out how much cover you’ll require is as easy as sitting down with your financial adviser and determining a figure that’s not too little, and not too much. This personalised and in-depth assessment will be based on your personal circumstances including: your total debt position, assets including superannuation and property, plus your family circumstances like education and childcare needs.
3. What should I look for (and look out for) in a policy?
Buying life insurance isn’t difficult, but it does require some thought. So don't ever feel pressured to make a quick decision. Take the time to consider your choice, and always make sure you:
4. What’s the best way to pay – stepped or level premiums?
Insurance premiums will generally increase over time – simply because health risks increase with age. That’s why most insurers offer two common ways of paying for, and managing, the costs of your cover over time:
5. How long do I need to be protected for?
We don’t know what the future will bring. That’s why it helps to plan ahead. You should begin the insurance relationship with an expectation that your cover needs to be continually adapted to suit your needs. The rule of thumb is that your need for financial protection usually decreases over time. For example, if you pay off your mortgage, reduce your debts, or no longer have dependants to look after financially, you may want to review your cover.
You should keep your policy as long as you require financial protection for your needs. If you no longer have debt, or have enough financial resources to maintain your livelihood should something happen to you, then you may no longer need as much cover. Lower cover usually means lower premiums, so it’s definitely worth reviewing your policy every 12-18 months.
6. What defines a trustworthy insurer?
Before making your final choice, be sure to consider:
Want to know more?
If you would like to discuss this post in more detail and receive advice that directly suits your particular circumstances, please click the link below to schedule a free 15-minute phone call.
Terrell Hyman the Director and Principal Advisor at Trl Financial Solutions.