Having insurance, especially life insurance, during the COVID-19 pandemic is crucial. Because insurance is meant to protect you in the chance of disaster, having that protection now is so important for your future and your family’s future as well.
Oftentimes, insurance companies make purchasing a policy a complicated process in order to make a profit— taking advantage of the fact that most people don’t fully understand life insurance policies.
What is life insurance?
Life insurance is a type of insurance that pays out a lump sum of money when you pass away, and it’s meant to provide your family members peace of mind in times of financial struggles that are caused by death.
A death in the family comes with a lot of big and expensive decisions. When you select a beneficiary, either you or this person may make a claim in the event you’re diagnosed with a terminal illness or you pass away. In the event of the insured’s death, your family will have financial security and be able to pay for funeral costs and medical expenses.
A life insurance policy details the circumstances under which a claim can be made and for how much. Life insurance comes with different amounts of coverage and covers different circumstances depending on the quote and policy you choose.
Before purchasing a policy, it’s important to compare life insurance quotes to find the best coverage with affordable premiums. It’s also important to remember that some insurers may require you to get a medical exam before you can get a life insurance quote.
There is no “one-size-fits-all” policy
There are many factors that decide which type of life insurance policy you should choose. There isn’t a specific life insurance policy that will work for everyone. Your lifestyle, income, budget, and medical needs are all determining factors for choosing a life insurance policy.
Some people will need an insurance policy with a larger payout. Maybe you have a large immediate family, or possibly you don’t have enough savings and assets to keep your family financially stable in the event that you pass. It’s also common for insurance companies to raise premiums for people with pre-existing conditions.
If you have a pre-existing condition you may also need a large payout for your family and medical expenses, but it’s crucial to do your research on policy options to make sure insurers aren’t overcharging you on your policies.
How to Compare Policies
In order to find a policy with a high cash value with the cheapest premiums, you’ll need to do your research. As a potential policyholder, you’ll need to discuss with insurers what the best type of coverage is for your situation. You’ll also need to determine how much life insurance coverage you and your beneficiaries require to ensure their financial protection.
It’s also crucial to identify the exclusions on claims and insurance proceeds that different life insurers have for policies. These exclusions could potentially affect your family’s ability to make a claim and receive their lump sum payout. Additionally, many life insurers include waiting periods in their policies. An extended waiting period could potentially hurt your family financially if they don’t have the funds to pay for all the expenses related to death.
How Premiums are Calculated
Premiums are calculated based on your age, lifestyle, amount of life insurance, occupation, and medical history. Insurance companies can also increase your premium payments over time by CPI indexation that is based on your age because as you age you’re more likely to develop a medical condition or make a claim. If your job is considered high-risk, if you drink and smoke, or if you have a family history of a certain medical condition you may wind up paying higher insurance premiums. This is because life insurance companies consider policyholders who fit into these categories to be high-risk and the most likely to make claims.
There are two common types of insurance premiums that life insurance companies offer policyholders: stepped and level premiums. Stepped premiums depend largely on your age, so the younger you are the less you pay. These premiums, however, are likely to greatly increase as you age. Level premiums depend less on your age, but they will cost the policy owner more initially than a stepped premium will.
What to Consider When Choosing a Policy
When shopping for an insurance policy, it’s important to consider what type of coverage will most benefit your spouse or heirs in the event of the insured’s death. There are several different types of life insurance policies and financial products available to policyholders. There is life cover, income protection, trauma cover, and total and permanent disability cover. Life cover is basically the policy’s death benefit cash value for the policyholder. Income protection is meant to guarantee your family’s financial strength in times where there is no paycheck coming in for some reason.
As a policy owner, you may go your whole life without ever needing to make a claim or withdrawal before your passing. It’s important to find a policy with the best rate, cash value, and death benefit withdrawals; this guarantees that your monthly premium payments are fair and affordable, and your family will have financial security during turbulent times.
