Protecting the kids is without a doubt one of your top priorities as a dad. Luckily, taking out life insurance is an effective way to ensure your family’s financial position is secured no matter what happens to you. Similarly, the insurance policy you choose must also meet your needs in a specified period or lifetime.
In this article, we share simple guidelines that will help you how to choose a suitable life insurance policy as a new dad.
Select the Right policy
People have different goals when choosing their life insurance policy. For instance, you could take out life insurance to pay off a mortgage or debt or to cover your final expenses. Life insurance can be broken down into two main categories: Whole of Life and term insurance.
The Whole of Life insurance policy is designed to be permanent cover and will therefore be with you throughout your entire life. It’s suitable when you have a need that lasts for an unlimited time such as a donation to family or estate planning. While this type of policy guarantees to accomplish your objective, it costs more than term insurance.
On the other hand, term life insurance expires after a preset period of time. This can be 5, 10, 15, 20, or 30 years. It’s intended to cover a temporary liability like a mortgage, car note, financial debt, and income replacement. The advantage of this policy is that it costs less and still able to cover your objective as long as the insured risk occurs during the term of the contract.
Evaluate your financial condition
To evaluate your financial status, check your debt and mortgages and then decide the amount of coverage that would cover all these financial obligations. Additionally, take into consideration the number of dependents and how much financial support they would need if you were to pass away.
For example, how much would be required to cater for their education, clear the mortgage, your spouse’s wellbeing, and so on?
Start early to save more
Your age is a crucial consideration in determining the cost of premiums in both term and Whole of Life policies. This is why it’s advisable to start young when your premium rates are still low. Overall, the younger you are, the cheaper your premiums will be as there’s a lower risk of becoming ill.
Compare the rates
Different life insurance policies offer different premium rates ranging from a few pounds a month to hundreds. Typically. The cost of life insurance will depend on several key factors such as:
- Health condition – you may be required to take a medical exam
- Whether you are a smoker or not – smokers pay higher premiums compared to non-smokers
- The duration you’re getting insured
- Hobbies – for example, scuba divers pay more due to the risks associated with the sport
Platforms such as Caspian Insurance make it easier for you to compare different life insurance providers in the UK. Check them out for great recommendations on life policies for dads.
Consider coverage features
Apart from the cost, you should also focus on other benefits you get from the insurance company. For instance, check whether the company offers living benefits as this allows you to access your own death benefit if you fall critically ill.
Additionally, get to find out whether they renew the policy (at a higher price) once the term runs out, in case you still have needs you want to accomplish. Some companies also allow you to convert a term policy to Whole of Life but there’s usually a deadline you have to meet. Finally, find out whether you can change the policy coverage amount if you need more coverage in the future.
When choosing a suitable life insurance policy, how the company serves its customers matters a lot. Usually, the older and more experienced insurers are likely to offer reliable support. However, the length of service does not always equate to a stellar track record.
An effective way to gauge customer satisfaction is to check the claims filed, the number of policy cancellations, and how long the claims process takes before compensation. Even so, the best way to determine the quality of customer support is by engaging the company yourself.
The purpose of taking out life insurance is to stand in your gap and help your loved ones in the event you pass away. Your goal should be to get an affordable policy but also one that guarantees meeting your needs when a risk occurs.
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