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Now Is The Time To Take Out Life Insurance
By Michael Challiner
Summary
The benefits derived from life insurance, and in particular term assurance, are assessed. The impact of your health, cancelling and re-insuring, and increasing your cover are also reviewed.
By Michael Challiner 21/01/2009 Term assurance, which pays out a lump sum if you should die within a given period of time, normally 25 years, is certainly the favourite type of life insurance. It also tends to be the cheapest as this type of policy has no cash-in value. You will get nothing if you should die after the term finishes. Cover worth 100,000 pounds, for a man of 35, taken over 25 years, will cost 10 pounds a month or if he is a smoker the premium goes up to 20 pounds a month.
To cancel your term insurance is simple. Just stop paying your premiums. It is unwise to rush into signing a new, more attractive, policy. There are so many factors, which affect the cost of a policy, such as your health, lifestyle, age and occupation. Before accepting life cover, insurers will assess your past medical history and determine how often you are likely to claim. You will have to complete a questionnaire on your health, which they will check against your medical notes. You will certainly have to pay more, if you have a poor medical record. You will find that it is only worth switching if you are in good health. You are best advised to stay with your present insurer if you have had a serious illness. Rival insurers will consider you to be a bad risk and charge you a higher premium. A bad back, high blood pressure and depression are among the common ailments, which will count against you. Do not cancel your old policy until your new one is signed and sealed as the underwriting process may spring a few surprises. You cannot start up an old policy again once you have cancelled it. Be cautious if you are offered extremely low rates. It probably means that the insurer is cherry picking, or in other words they tend to pick the people and families, who are enjoying excellent health, for the lowest premiums. Do not change your policy just for the sake of a lower premium, but, at the same time, make sure you have adequate cover. You may also want to purchase additional cover when your personal circumstances changes. For example you may have more children, perhaps your salary has gone up or your mortgage has risen. In the past, the cover you were recommended to buy was four times your income. Although this benchmark may have been reasonable, the money will not last long if you have a big family and many overheads. It may be prudent to buy more cover in these circumstances. When you calculate how much you will need, remember to include any other existing life cover, like a death-in-service benefit from your employment.
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Contributor's Note
The benefits derived from life insurance, and in particular term assurance, are assessed. The impact of your health, cancelling and re-insuring, and increasing your cover are also reviewed.
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This intel first appeared on: http://www.life-assurance-bureau.co.uk/life-insurance/life-insuranc...
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PLEASE VISIT THE CONTRIBUTOR'S WEBSITE
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www.life-assurance-bureau.co.uk
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