Your guide to buying life cover
Interested in investing in life insurance? Smart move. A life insurance policy is the financial protection your family needs against the loss of your income in the event of your death. If you are feeling a little unsure about taking the leap into the world of life cover then we have the advice you need. Here are our five golden rules for buying life insurance.
Buy from a reputable provider
Buy your cover from a reputable broker and/or life insurance company. All financial services providers have to be registered by the Financial Services Board. Contact them on 0800 110 443 to check that your providers are registered with them.
Work out how much cover you need
Calculating how much cover you need is a job best left to the professionals. Ask your broker or life insurance company to perform what is known as a financial needs analysis. This is a method of calculating how much cover you need by assessing your current assets and liabilities as well as your existing insurance portfolio.
Do not withhold any information
Be scrupulously honest and provide as much detail as you can when answering any questions put to you by your life insurance company or broker. If a provider finds out that you withheld information from them any claims your family makes might be reduced or even rejected. Don't withhold information about your smoking or drinking habits, for example, or about your family's medical history.
Nominate a beneficiary
Be sure to nominate a beneficiary. If your policy does not have a beneficiary your benefit amount will be paid into your estate and the funds could take years to reach your family. You can nominate more than one beneficiary, for example your spouse or partner and each of your children. You could also nominate your favourite charity as one of your beneficiaries.
Read your policy documents
Read your policy documents carefully from start to finish and contact your broker or life insurance company if you have any questions. Take special note of any exclusions, premium increases and waiting periods.
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