Let’s face it: life insurance doesn’t exactly make for polite dinner party conversation. When you’re wracking your brain to discuss something other than the weather and your weekend activities, death isn’t usually a topic that springs to mind. Unfortunately, death is a part of every life and it’s something we should prepare for, regardless of how disconcerted it makes us feel.
Some people avoid discussing life insurance because it feels like tempting fate – “If I get life insurance, I’m more likely to die.” In reality, the only thing that’s more likely to happen if you get life insurance is that you’re better prepared when something does happen to you. Just like having travel insurance won’t increase your chances of having lost luggage, it doesn’t make sense that obtaining a good life insurance policy is responsible for a freak accident coming your way.
Time to Clarify
Just to clarify – Life Insurance isn’t just about protecting yourself (and your family) if you die; there are varying types of life insurance products available, including Total and Permanent Disability (TPD) and Income Protection; these two types of insurance cover you if you’re involved in an incident or accident where you are permanently unable to work or if you are unable to work for the short to medium term. Life Insurance isn’t just about death.
The D Word
No one wants to think about dying but the fact is, it really is a part of every life. And we have little control over when and how it happens. What we do have control over is whether we provide protection for our nearest and dearest after we are gone. Think about your loved ones – can they afford the mortgage, the school fees, the credit card bill, or even groceries if you’re gone? These are all sensible questions to ask when you’re working to secure your family’s future.
Types of Life Insurance
There are a few types of Life Insurance, so consider the differences carefully before deciding on a policy:
Life Cover (or Term Life Insurance) provides a lump sum payout in the event of death. Most products also include a feature called Terminal Illness Benefit which provides a lump sum upon the diagnosis of a terminal illness.
Total and Permanent Disability (TPD) covers you if you suffer an illness or injury that leaves you totally and permanently disabled. Depending on the product, cover can be provided to protect if you are unlikely to be able to work again in your ‘own occupation’ following an illness or injury, or in ‘any occupation’ following an illness or injury.
Trauma Cover (or Critical Illness Cover) pays out a lump sum if you experience one of the product’s listed severe medical conditions, such as heart attack, stroke or cancer.
Income Protection insurance provides you with regular payments of up to 75% of your yearly income in the event that you are injured or ill and deemed medically unable to work.
You can choose life insurance as an individual or a family. You can also take out life insurance for children (often known as juvenile life insurance.) With a plethora of terms and definitions to get your head around, it pays to read the fine print before finally selecting a policy that suits your needs, and the needs of your family should something happen.
The Final Word
Life insurance premiums vary depending on the age, health and occupational risk of the person being insured. It’s important to compare providers to make sure you find the right Life Insurance policy to suit your needs and to ensure you’re not paying more than you need to. No one wants to envisage how their death may affect their family, but with the right Life Insurance policy, you can instead focus on getting the most out of life, with the peace of mind that your loved ones will be protected.Top image source.