What you should know about Life Insurance

Protecting the future of your family depends on you. That is why purchasing life insurance is a wise choice to cover the financial future of your family in the event of your death or disability.

The Purpose of Life Insurance

This type of insurance serves as an important source of income for your family following your death. It can also help pay your estate taxes and cover funeral arrangements. If you have children, a spouse or other individuals who rely on your income, purchasing a life policy is in their best interest.

Figuring Out How Much Insurance You Need

Factoring the amount of life cover you will need to purchase depends on a variety of factors. Consider all of your assets, debts and sources of income. Look at how much you spend annually on household expenses. Consider covering your family’s standard of living for a length of time when determining how much to invest in life insurance.

What To Look For in a Life Insurance Policy

When shopping for life cover, make sure the policy your considering a rapid build-up of cash value. Look at how the cash value of other policies has preformed in the past. Determine if there are benefits that will add value to your policy. Also, review the company’s rating to ensure they are reliable and trustworthy life insurance company.

Shopping for Life Insurance

There are 15 licensed life insurance companies in Nigeria, according to the National Insurance Commission. It is important to choose a reputable company, so do preliminary research and check with a few companies before deciding on a policy. Insurance companies place individuals in various risk categories, such as standard, substandard and uninsurable. Having a risky job or a terminal illness at the time you apply for a policy could determine your level of life insurance policy available.

Types of Insurance Policies

Every person has different needs when it comes to life policies, which is why there are various options to choose from. Policies are grouped in to term or permanent policies. Term life insurance pays a benefit in the event of a death of the insured individual during a specific period of life. Whole life insurance covers an individual’s entire lifespan by accumulating a cash value, starting at the time of purchase, and pays a benefit on the death of that person.

Review your Life Insurance Policy Regularly

Once you’ve purchased a policy, it’s important to review it regularly to ensure it still meets your family’s lifestyle needs. Specific life happenings, such as getting married or divorced, the birth of a child or grandchildren or retiring, can warrant adjustments in your policy.

It is important to purchase life coverage to protect the financial future of your family, especially if they are dependent on your income. Knowing how to calculate what you need and the fundamentals of each policy will help you determine what fits your needs best.

Share this post