If I were writing this piece a few years ago, I think it would have been titled differently; something like “Why you need a life insurance” would have sufficed. However, I believe we are now past the stage of convincing folks about the importance of insurance- of any type of insurance, and have advanced to my present title so I plunge right in.
Before any insurance firm signs you up on a life policy, a few things will be considered such as age, health status and habits. This will enable them ascertain a premium that is commensurate with their risks. I will leave their considerations to them and inform you of some of yours.
Who do you want your death to be beneficial to? It works almost the same way in the movies. You need to ask yourself if your life policy is making you a target for sinister schemes.
It’s advisable to check some boxes such as trustworthiness, life expectancy and financial stability of your prospects before naming a beneficiary of your policy. The most important seem to be the issue of trustworthiness.
The cost of any policy should be considered vis-a-vis the expected payout to the beneficiary and the interest/ inflation rates. Paying a $5 premium annually to get a payout of $50 in the event of death does not seem as sensible and appealing to a 27 year as opposed a septuagenarian. This is especially important when considering “one for all” packages insurance firms advertise. Another key consideration under this heading is the affordability of the premium. You need to consider how well the premium payment fits into your financial budget in the short and long terms. After-all you are not planning on going as soon as possible.
Your Insurance Firm:
Insurance is not something that should be bought to encourage the seller (who is your nephew on his first job), rather it’s a transaction that is life dependent and should be treated with such degree of importance.
EVERYTHING about your prospective insurance firm should be considered. Their financials, management, investment portfolio, market share, business model, history etc. should be considered before selecting one from the rich array of insurance firms out there. Trust me, it won’t be funny if your insurers liquidate while you are still alive.
Does your life policy cover burial cost? If so, to what amount? Does your policy offer a cash back guarantee, and how long does it take to qualify for such? At what interest rate?
The insurance industry is highly competitive, much to the advantage of the customer. Exploit this advantage by taking as many add ons that are necessary to you. It’s a heavenly bonus.
The Fine Prints:
One distressing thing about being dead and buried is that you cannot argue your point with the living or the insurance brokers. You don’t want to add to your beneficiary’s grieving by signing up to something you don’t understand and/or won’t beneficial to them when they need it the most.
Take time out to study the fine prints, the clauses, before you sign up. Draw the attention of your broker and/or lawyer to explain the jargons in the agreement and ensure your policy certificate is clear and concise.
About the Author: Writing under the pen name @Zolonye across major platforms, he sees the business and financial world from an engaging perspective.