If you are thinking about taking out life insurance, chances are that you have a few questions about the ins and outs of what it means to have a policy, and what to look for. To help you in taking the next step, here are 5 frequently asked questions about index universal life insurance – explained!
What is life insurance?
The dictionary definition of life insurance is insurance providing for payment of a stipulated sum to a designated beneficiary upon death of the insured.
In other words, to put it more simply, life insurance pays out a chosen amount of money when the policy holder dies. The sum of money and the people who receive it are agreed with the insurer when you take out the policy of your choice. Globe life can give you the best Insurance service.
Do I need life insurance?
Whether you need life insurance depends on your personal circumstances. There are a wide range of reasons why you might feel like you need to take out life insurance. According to the Money Advice Service, you are most suitable for life insurance if you have:
- Dependents, such as school-aged children, aging parents, or you are a caregiver to a family member.
- A partner who relies on your income to get by every month.
- Family living in a house which has a mortgage that you pay. The life insurance policy can be agreed to pay the mortgage for you if you die.
You might also take out life insurance to cover your funeral bills. Whilst morbid to think about, funerals can be extremely expensive, and so this could greatly help your family handle these expenses once you are gone.
When should I get life insurance?
Though it is uncomfortable and saddening to consider, the reality is that death can come at any time. Whilst you might not even begin to consider life insurance whilst you are young, this can benefit your policy.
By not putting off life insurance until you are older, this means that you won’t be in for any nasty surprises. It might be a bit cheaper for you too. This is because life insurance costs are based on your overall health. By taking it out when you are young and healthy, this keeps the cost down and protects you in the event of a later illness or condition.
Will I get life insurance when I get a job?
Some employers offer an employee benefits package which includes life insurance for employees. Employee life insurance covers both the business and the employee’s dependents if they die whilst in that employment. This is called death in service.
If you are still employed with the company when you pass away, a lump sum will be given to your beneficiaries to cover the loss of your income. It also supports the company who are left with a sudden vacancy.
How much cover do I need?
The simple answer is that this entirely depends on your personal circumstances. It depends on a variety of factors including the cost of your mortgage, cost of raising children, and how much you earn every month, amongst other things.
Though life insurance might be full of jargon and confusing to understand, by looking through these frequently asked questions it has hopefully shone some light on the decision at hand.