The deal with life insurance
What is life insurance
Life insurance is like an elephant in the room, its far more aparent about why it is an elephant when the bills come in and money goes out. The pay check comes in and mostly it goes in one direction. Just as sands flow through hourglass, the money just filters through never staying, the nice thing is it goes to build a lifestyle that is comfortable.
While the income keeps coming in, the big elephant in the room is not considered; Nobody ever thinks they would get sick or worse not see their kids children. Until an unfortunate and unexpected situation arises, only then when the option of life insurance has just been obliterated is it contemplated.
Life insurance is not a fun topic nor it is it something to just get out of the way. It needs to be considered and well thought out so that the family is properly covered in case of a tragic situation. Many factors affect the level needed for life insurance cover.
Things to consider when obtaining life insurance:
Current debts – money owing on cars, mortgages,
recurring bills, personal loans, credit cards, and expenses relating to raising children, school fees or college funds.
Funeral Expenses– A funeral is a time that is time to reflecting on the persons life, and follow the greiving process, to have small amount of closure. Not worrying how to pay for the funeral, and feeling guilty for spending too much or too little due to expense.
Cover for illnesses– Terminal or critical illness. Illness is a vital thing to obtain in any life insurance policy as there are illnesses that will knock us out of action for 1 - 2 years. With the added stress of finances through loosing an income, can delay recovery.
- Terminal Illness or injury is generally given a time frame that the person from injury or illness will be 12 months from onset to end.
- Critical Illness see Trauma insurance its just another name.
Types of Life Insurance and extras available
For a fixed time this policy will be cover the selected persons life, and most of the basic policies have terminal illness insurance included.
Exclusions in a term policy are suicide within the first 13 months of the policy. Terminal illness is not covered by illness or disease that is deliberately caused by the insureds actions.
Depending on the policy, war is sometimes excluded, pre-existing conditions that weren’t disclosed are not covered.
In the case of it not being covered this means the policy will not be paid out.
Whole life policies also known as Permanent life insurance(with some variations)
Generally provide only death cover that include a savings component at a conservative interest rate, that is then paid to the account holder. It has not been found to be an effective form of investment. The amount that pays out at death accumulates with time.
Universal Life coverage
Is similar to whole of life policies, however the insured can change the nominated amount and this makes the insurance premiums flexible.
Generally means the policy won't be paid over 65 years.
Endowment policies are similar to whole life policies, however it is taken out for a set time period, and are a combination of savings and death cover. The amount that is paid out on death is larger the longer the policy is held, and the basic policy does include terminal sickness cover, extras are also available.
Total and permanent disablement insurance cover
This is generally an extra to the trauma or life insurance policy, as the name suggests the insured person receives the nominated amount if the unfortunate were to occur.
Is a policy on it's own or an added extra to a life insurance policy. Trauma's covered are listed in the policy be sure to read carefully, you can pay extra to gain more.
The benchmark for basic cover generally includes, cancer the malignant tumours, heart attack, coronary artery surgery, stroke, or terminal illness. Some companies may expand on this list and add paraplegia, quadriplegia and occupationally acquired HIV.
This ensures that you can re-insure without further medical evidence.
Funeral Cover Expenses Insurance
Can be purchased separately or as an added on extra and in insurance policies such as over 50's life insurances it is part and parcel of the package.
Over 50's life insurance
Cover for people in their golden years to not worry about the recurring expenses or funeral expenses for when they pass, to leave their families without bills. It is paid on death generally less than the maximum of $50,000.00, depending on cover.
Provides payments to the insured in the event of being unable to work due to accident or sickness, generally paid monthly and at 75% of the insured’s wage.