Things to Consider When Buying Life Insurance 

 October 9, 2021

Once you’ve decided to purchase a life insurance policy, the next thing you need to do is figure out what features offered by the insurance company are important to you. For instance, are the premium payments flexible? Are there any death benefits? Does the life insurance policy offer other financial products, like an investment component, for instance? A great life insurance coverage can help offset funeral costs, in the unfortunate case of the insured’s death.

Besides this, it can also offer financial protection to your spouse and give your family the peace of mind that comes with knowing that they can pay off any outstanding debt or mortgage payments, even after the policyholder has passed away. Choosing a life insurance company is a permanent and important decision to make, so to help you make the best decision for your family, we’ve compiled some key features to look out for before you make this decision.

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Your Insurance Needs

A good way to go about this is by asking yourself how many of your family members are dependent on your paycheck. For instance, should you, as the policyholder pass away, is there any form of financial security in place that can tide your loved ones over? An insurance agent or other financial professionals can help you understand your unique insurance needs and also help you find the type of life insurance that’s best for you and your nominated beneficiaries.

Available Insurance Options

When looking shopping for a life insurance policy, make it a point to first compare policies to make sure you’re getting the best insurance deal. To do this, first, have a list of different policies to compare against each other. After this, take advantage of iSelect’s comprehensive database of life insurance policies to find the best fit for you.

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As you compare different policies, consider the type of life insurance cover. In the Australian market, the four most common life insurance policies include term life insurance that offers lifetime coverage, total and permanent disability insurance, income protection insurance, and trauma insurance.

This being said, make sure what you’re getting is relevant and relevant to your needs. Also, consider how long your nominated beneficiaries will have to wait to receive the insurance proceeds, and what documents you’ll need to provide as you apply for the policy.

Your Budget

After establishing your insurance needs, as you compare policies, also factor in your budget. To avoid stretching your finances too thin, pick a policy whose monthly premiums you can comfortably pay. The best thing about comparing policies among different insurers is that you can ask for quotes. You should also know that there are two types of insurance premiums: Stepped and leveled. Stepped premiums tie in with your age, and they tend to increase as you get older. In the beginning, level premiums are typically more expensive than stepped premiums, but they aren’t affected by your age.

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So as you shop around for a policy, also consider if you’ll be able to afford it in the long run. Besides your age, other factors that affect the affordability of your policy include your medical history, gender, lifestyle, and the nature of your job.

The Insurer’s Claim Settlement History

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The whole point of getting an insurance policy is to have the peace of mind that comes with knowing that should you, your heirs, or nominated beneficiaries come into future financial trouble your life insurers will pay the benefits on time. Part of choosing a life insurer is doing some research of your own, so as the insurance company vets you through a never-ending pile of paperwork, do the same by researching their claims repayment history.

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