Not to sound morbid: but one should really not put off planning for death

Not to sound morbid: but one should really not put off planning for death
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Published March 29th, 2015 - 17:36 GMT via SyndiGate.info

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And although no one would like to dwell on such a tragic scenario, having some safeguards in place can guarantee that your family stay afloat — at least financially. (Shutterstock)
And although no one would like to dwell on such a tragic scenario, having some safeguards in place can guarantee that your family stay afloat — at least financially. (Shutterstock)

There may be never a good day for you to decide to think about your own death. But, let’s face it: Things happen and when they do, your family could be in a serious financial trouble coupled with the personal loss.

And although no one would like to dwell on such a tragic scenario, having some safeguards in place can guarantee that your family stay afloat — at least financially. That is why considering life insurance is critical for almost anyone with dependents. Unfortunately, however, you won’t be there to judge the quality of your life insurance policy or to haggle over the phone with an unresponsive agent to get a claim through. That is why shopping for the best policy — and the best provider — is your only guarantee that the process will go smoothly for your beneficiaries.

Here are a few things to keep in mind.

Understand the differences

Life policies are not all the same. The two major types are term policies and universal policies. The first type is the most common: Your policy runs for a certain period — say 30 years — and if you and your beneficiaries don’t have a reason to make a claim, the policy expires and the money you’ve paid is gone. Universal policies typically combine the insurance benefit with some savings, which means you can cash out the amount you paid — or part of it.

There are many variations to these types, and based on your personal situation, one may be more fitting than the other. But it is important that you know about all the options as well as their exclusions, benefits and extension potential before you sign on the dotted line.

Ask questions

Regardless to what they say, many insurance agents may push one policy or another. It is important that you question the basics of this policy. For example, if you’re 20 and you’re buying a 30-year term policy, you may be told that an extension is possible when you hit age 50. What you’ll need to know is the restrictions and cost of such a restriction. Remember, your premium can skyrocket as you get old — and if you have any health issues.

You also should question what the policy offers. Many life insurance policies offer a lot more than a benefit in the event of death. For example, some may offer a cash amount in case of disability; others may pay for senior living accommodation, etc. The more information you gather in this early stage, the more likely you will be able to make an informed decision for this long-term commitment.

Go the extra mile

Life insurance is a complicated matter because the provider isn’t only betting on your current health, but also on your lifestyle and future medical status. This could significantly increase your insurance costs if your coverage isn’t personalised and based on general criteria such as your age and gender, which is the case with ready quotes that you may be getting quickly over the phone or on the internet.

You can help yourself save a bunch on your monthly premium, however, if you go through a more lengthy application procedure that requires comprehensive questionnaire and a medical test. Many may see this unnecessary in age where you can fill an application online and get the entire process done with a couple of click. However, you must consider the cost difference when calculated over a lifetime.

Know your providers

As with any insurance policy, you want to make sure that the provider will be there for your beneficiaries and fulfil their claim quickly and efficiently. With that in mind, you need to ensure that your provider is a reputable company not only with a stable history, but also with a foreseeable future since most insurance policies run for decades to come.

A provider who is sloppy about paperwork, unprepared to provide answers and only interested in getting you signed in so premiums can flow in may not be a good option for the long run.

By Rania Oteify

 

© Al Nisr Publishing LLC 2015. All rights reserved.

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