Have you ever wondered how term life insurance works? Here is an easy explanation to get you started.
You may know term life insurance by one of its other names: life cover, death cover or life insurance. By any name, term life insurance is an inexpensive way to protect your family in the case of your death or diagnosis of a terminal illness.
You pay premiums for the policy. If you die or are diagnosed with an illness that is likely to be terminal within twelve months, your family receives a lump sum payment. Policies are different from provider to provider, but here are some of the more important variances.
Benefits
The benefits available in life insurance policies can differ from provider to provider. You may choose your level of coverage based on how much you want to spend on premiums. Most companies have a minimum amount that you can apply for and a maximum amount. The maximums are based on age, decreasing as one becomes older. Premiums tend to increase with the beginning age of the insured.
Inclusions
Many policies have various inclusions. For example, many offer to advance part of the payout for funeral expenses. Some have inflation clauses or increase by a predetermined amount every year to compensate for inflation. While some policies don’t guarantee renewability, some do guarantee that a policy can be renewed as long as premiums are paid.
Talk to a Professional
At Approved Financial Planners, we offer a full range of financial planning services and a full range of insurance products. Our professional financial planners can help you determine what expenses your family would need to be covered in the event of your death and figure out how to fit premiums into your budget.
We also offer services such as superannuation, self managed superannuation funds, cash management, debt management, investment planning, estate planning and wealth protection. We have been providing financial planning advice in the Perth area since 2005. Our financial planners have more than 80 combined years of experience in the industry.
One of our financial planners will be happy to provide an obligation-free consult. Together, we can look at your financial situation and take steps to improve it for you. For more information, please call 08 6462 0888.