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12 Basic Life Insurance Questions Part Two
We follow up with the second part of our two part series on 12 Basic Life Insurance Questions. For Part One See here
7. How Much Will The Insurance Cost?
Insurance costs depend on a number of factors that insurers use to determine the amount of risk associated with the insured.
- Age, sex and medical history
- Whether the person seeking cover is a smoker or not
- Type of policy and the amount coverage that is being sought
- The term or duration of the policy or cover.
A rough guide to the cost would be a level term insurance policy which provides $100,000 in cover would cost under $7 for a non smoking female 35 year old, and under $8 for a male of the same age who was also a non smoker.
Obtaining a quote on the cost of premiums from either an insurance broker or the insurer directly is an easy thing to do.
8. Are Joint Policies A Good Idea?
Joint policies do not provide the cost effectiveness that one would imagine and are usually only a little less cheaper than having two separate policies in place. Two separate policies provides double the cover for only a fractionally higher cost.
Under a joint policy, the insurer will only make one payout in the event of a single death for a single life.
9. What Would Stop A Policy From Paying Out?
Non disclosure is the most common reason for life insurance policies not paying out. When buying insurance and filling out the form, the individual should be careful to make sure that all the details provided are accurate; any inaccuracy may result in the whole policy being invalidated.
A lot of policies come with exclusions which the policy will not pay out on, so before buying cover the individual should make sure they read the terms and conditions and are aware of the exclusions
10. What Should Individuals Do If Circumstances Change?
When a person changes their circumstances or enters into different stages of their life, they should update their life insurance policies. Reasons for doing so or buying more can be anything from having a new child to buying a new home, but when circumstances change then life insurance needs to reflect the changed circumstance.
11. Should The Policy Be Written In Trust?
Writing life insurance policies in trust can help families avoid inheritance tax on the death of the insured family member. Most term insurance policies have forms attached which allow the insured individual to name the beneficiary, and thereby allows the insured’s family to avoid what can be quite a hefty tax on the individuals estate.
12. What Should Be Done If The Policy Is No Longer Required?
The simple answer is to cancel the policy. The individual should endeavor to make sure that the policy is really no longer required however.
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