If you are a family person then not having a life cover should surely not be your opinion. A life cover gives your family financial security, not only when you are with them but even after your death. It is essential to decide the right amount to have a life cover, which to some extend depends on your monthly salary and the savings done from it. The amount of life cover may vary from person to person. Having a life cover is the most important thing which a family man should have. If you are interested to know more about the actual amount that you need to cover for your family, you may read this discussion.
If ever you meet an insurance agent he would definitely suggest you to have a live cover which is four times or even eight times of your annual salary. If you have a salary of $40000 you would have to have a life cover of $160000. This amount may not necessarily be enough for you. You are bound to know more about your family than any insurance agent would.
There are a few important points that are to be kept in mind before deciding the right life cover for you. Like for example, what kind of financial back up have you set up for your family, is your spouse earning, are the kids old enough to manage their lives, what if you are a single parent, how are the things going to be managed by your surviving spouse, and so on.
Further, when considering a term insurance, one should also take a look into a special type of term insurance where the cover decreases during the entire duration that the life cover is in force. Thus, the beneficiary of this type of term insurance receives the maximum death benefits if the policyholder dies before the first anniversary of the policy while the former receives the lowest amount of death benefits if the policyholder dies within the last year of the policy.
Life insurance policies come in two types, namely term insurance and investment type insurance. In case of the term insurance, your family can only claim the insurance if your death occurs during the active or valid phase of the policy. Once the policy has expired, no claims can be made. As against this, investment type insurance keeps you insured as long as you live. All that you need to do is make regular payments of your premiums. This policy is also termed as the whole life policy. One good thing about this policy is that every month, the insurance company deposits some part of your premium into your investment account. You can then withdraw this amount some time later. The amount would however get paid to your family, in case you happen to die before you withdraw the money.
You could even get a handsome amount of discount from multiple insurance companies if you get a multiple policy for your kids and spouse.
If you are considering a more flexible type of life insurance, then a universal life insurance can be the ideal policy for your requirements and situation. You can use the accrued savings of the policy to adjust your premium payments.
Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Life Insurance.
Tags: Death, disability, finance, health, insurance, Life Cover, life insurance, medical insurance, people