On more than one occasion, you will have kept awake worried about how your family will live if something happens to you. Do not look for the remedy in the pharmacy, although you can also find it, better look for it in good life insurance.
What if I have an accident that prevents me from going back to work?
What if I am unemployed and cannot find a job at my age?
How much will I have left when I retire, will I be able to live with the pension?
Living quietly can be cheaper than you think. You just have to keep these 5 things in mind before taking out good life insurance.
#1. Why do I want to take out life insurance?
The first thing you have to evaluate before purchasing life insurance is what you want it for, what are the coverages you need. To give you a quick idea there are 3 groups of life insurance.
1.1 Life risk insurance
It groups together all the modalities in which death is the trigger for the insurance benefit, paying capital to the beneficiaries of the insured.
1.2 Life insurance savings
Its purpose, as you can imagine, is to accumulate capital that we will be able to make effects on the contract termination date. An example: at the time of retirement or when your daughter starts college.
1.3 Mixed life insurance
It combines the two previous modalities: in the event of death before the end of the contract, the beneficiaries will collect the agreed capital. In case of survival, it is the insured himself who will collect the accumulated capital of the savings.
#2. A personal audit, what resources do I have?
Income, expenses, future commitments, equity, four concepts that you must analyze.
You have to start by calculating what your family expenses are and what income you have, not only now, you should make a future projection, no one better than you to evaluate the possibilities you have.
You must think about the commitments made and their extension over time, loans, or mortgages that you will have to continue paying. But also with the patrimony that you can leave and the returns that it can generate.
The result of that small personal audit will help you to know what capital you should insure.
#3. How healthy am I?
You should not only take into account the purely economic aspects but also personal, health.
I’m like a kid, made a bull!
Be careful not to confuse wishes with reality, it will depend on the insurance you choose that you have to pass a medical examination.
The higher the insured capital, the greater the chances of this happening. If you do not have to carry out the medical examination, you will have to fill out a declaration of health status, in which I advise you not to hide any information.
Age, health status, or profession determine the premiums you will have to pay for life insurance as they define the risk assumed by the insurer.
#4. A personalized insurance for my needs
The moment of truth has arrived, choosing the product that best suits what you are looking for. The offer in the insurance market is very wide so you have a lot to choose from.
Don’t be dazzled by advertising, because it’s just marketing. You must be very clear about what the product offers you, the different forms of compensation it has, its limitations, or if you can customize it by adding or removing coverage.
#5. Costs and taxation
You only have to read the conditions of the contract. Clarify all the doubts you have. Pay special attention that the personal data is correct, that the dates linked to the contract are correct or that the beneficiaries are those you have designated, and above all, the insurance costs.
Premiums in risk life insurance tend to increase year by year depending on age, the same can happen to you in savings life insurance if you have chosen to increase the annual fee in percentage terms, so you have to think that in the future your economy will have to bear this increase.
You should also think about taxation, because there are several forms of taxation that you can find at the time of receiving the savings, depending on the type of life insurance you have contracted.
As you can see, sleeping peacefully doesn’t cost that much if you can afford it. It is only a matter of investing a little time in choosing the best life insurance and allocating the money necessary to ensure a better retirement or guarantee your assets in your absence.
Now it’s your turn, that’s why I’ll leave you this question and I’ll wait for you in the comments where we can discuss your answer
What life insurance do you have contracted or which do you think you need?