The Life Insurance Guide

A life insurance policy provides a lump sum payment upon the death of the policy holder. However, there is much more to it than that. Following is a helpful guide to life insurance:

A life insurance company -- in exchange for regular premiums -- will ensure your life so that when you die, the policy will pay out to your dependants and keep them from experiencing financial hardship.

Depending on whether you choose a single or joint life policy, your insurer will pay either a lump sum or a regular income which could be used toward meeting any outstanding debts thereby ensuring that your family maintains its standard of living.

The “guaranteed sum assured” is the amount for which your life is insured and your dependants will receive upon your death. Many people don’t purchase life insurance policy until they take out a mortgage. In order to make sure they can be repaid if you should die still owing them money, most mortgage lenders insist on the purchase of a life insurance policy when taking out a mortgage.

In some circumstances, however, to fully protect your dependents, it’s necessary to have more than just a life insurance policy that repays the mortgage. Life insurance is very important for your wife and young children who may depend on you.  In addition to repaying a home mortgage, life insurance can be used to pay inheritance taxes or protect a business against the loss of a key individual.

Our lives are ever-changing and so we should increase or decrease our coverage at changes are made. Another policy can be added on or perhaps a critical illness coverage, income protection or mortgage protection plan can be added on. Whenever life’s circumstances are changed, it’s important to sit down and review your life insurance and make the necessary changes to assure that your family is fully protected.

After your debts and expenses are paid, life insurance creates an estate for your heirs automatically providing them with assets after your death.

If you are healthy enough, there are several kinds of policies that are available to you.

Since smokers are known to die earlier than non-smokers they pay higher premiums. If you are a smoker and don’t declare that fact, you run the risk of invalidating your policy if you make a claim.

Yes, it’s true; women do tend to live longer than men. Therefore, a female who insures herself using a “level term” policy is likely to have lower premium payments than a male.

Another important factor in acquiring life insurance is age. Since most insurers have an age bracket of 75 for the provision of insurance, if you are over 75 you are less likely to find coverage.

The older you are the greater the risk you are to the insurance provider and therefore your premium will be higher.