Before hiring life insurance it is important to reflect on some aspects that will be decisive in your choice.
The initial basis of life insurance is very simple. The policy will pay compensation in case of death or disability of the insured. However, life insurance includes very important nuances that you should consider. Above all, because, life insurance at 30 years is not the same as at 50 years.
Therefore, when choosing the most appropriate life insurance for your needs , we propose five things that you should seriously value.
At what age do you make sure and what does insurance offer at your age?
The choice of hiring life insurance is often given by age and the feeling of wanting to protect our family. However, this is relative.
It is often said that the most common age range to take out life insurance is between 30 years and 50 years . Think that insurance of these characteristics is conceived as an economic protection coverage for you or yours in case of a fatality. In other words, if you are under 30, but you have already formed a family and have children, your protection needs are the same as those of another person in your situation with more than 30 years.
You should also take into account, it is true, that at a younger and older age, it is more complicated (and can be more expensive) to access these insurances. For example, it will be difficult to take out life insurance before age 18 and after age 65.
The importance of age in the contracting of life insurance is also given by the need for equity to be covered, that is, by the amount of compensation you wish to contract. It is likely that at 50 years the amount you want to insure is not the same as at 30 years, either for the savings developed, or for the family needs that may arise, age is a key factor to be assessed before contracting the insurance of life.
What type of insurance are you going to hire
It is important to be clear that there is no single life insurance, therefore, you should evaluate the different options you can choose, they would be the following:
Life Insurance Risk
It is the traditional life insurance in which the beneficiaries are offered economic coverage in case of death . In this way, the beneficiary would receive a capital that has been previously established when the insured has signed the policy.
Here you can find two different modalities:
- The whole life insurance that offers the payment of compensation immediately after the death of the insured.
- Temporary life insurance, which will cover the risk of death for a specific period of time, which is stipulated in the policy, and after which the protection will cease to take effect.
Life Insurance Savings
It is a different life insurance model, but, which has grown a lot in recent years. In the life savings insurance, the insured’s survival guarantees him to receive the contributed capital plus the agreed interests if he lives when the policy is fulfilled .
It could really be compared, by bringing the idea closer, to a deposit that also includes a life cover for the beneficiaries in case of death during the duration of the same.
This type of insurance is increasingly used not only as a protection tool, but also as a retirement savings product.
Also keep in mind that in some cases you can access insurance offers in which the coverage is doubled in case of death by accident , or simply by diagnosis of illness that makes you unable to practice your profession in the future.
Finally in some cases they can offer you mixed or customized formulas.
What is the insured amount?
Obviously the insured amount is a key element to assess in your life insurance choice.
In some cases these amounts are preset at different scales and, logically, they are directly related to the cost of the policy: the higher the level of protection, the greater the cost of the policy .
The best way to determine what you really need is to calculate what would happen during a certain period of time if your income will stop coming to your family , either due to death or disability. This calculation can help you when choosing the insured amount you really need.
Generally, there is a tendency to assess issues such as being able to pay off the remaining mortgage costs and loans in force at the time of signing the policy , as well as a certain period of time equivalent to the salary you enter. This period of time can range from three years to five years. But, remember, every person is different and every family need for protection is too. You must determine yours.