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What are the main types of life insurance cover?

There are a variety of life insurance policies designed to meet different needs. These are some of the most popular.

Long term life insurance

Long-term life insurance pays a fixed amount of money, for a specific period of time, that you choose when purchasing. It can help cover debts like a mortgage. If you die within the chosen time period, the policy pays a lump sum to the beneficiaries. But if you die after this period, you won't pay for the policy.

Reduction of life insurance.

Reduced term life insurance is a type of term insurance policy aimed at people whose financial obligations decrease over time, for example, if you are paying a mortgage. Because payments decrease over time, this type of life insurance is generally cheaper than long-term insurance.

Whole life insurance

Whole life insurance, also called whole life insurance, is a policy that lasts as long as you always pay for it in the event of death (as long as you keep up with your monthly payments). This type of policy is often used to offset inheritance tax payments.

Joint life insurance

Shared life insurance is a life insurance policy that covers two people (usually a married couple), but is paid only once. Typically, this payment will be a lump sum to go to the survivor if the first person dies during the life of the policy. When the policy ends with the first death, the survivor will not have coverage for life and will have to find another policy if they still want coverage.

Over 50s life insurance

Life insurance plans for more than 50 years tend to offer smaller payments to cover things like funeral expenses. The amount you pay for your premium is guaranteed, so it won't go up or down. If you live for a long time, you may end up paying more than the policy pays.

Do i need life insurance?

Although it is not necessary for you to have life insurance, many people choose to purchase life insurance because it provides a form of financial insurance for their family in the event of death. Losing your income or family contribution can cause financial hardship for your family and dependents. Life insurance can provide a cash safety net to help your family pay bills and help ease the burden of worrying about money in tough times. If you have a mortgage, the mortgage provider may insist that you have life insurance so they know that the mortgage can be paid off if you die.

How much life insurance do I need?

The appropriate level of life insurance coverage for you depends on your personal circumstances. In general, the more coverage you get, the higher your premium. However, if you are underestimating the amount of money you will take out of a dependency, it can leave your loved ones at a disadvantage.

Think about the income your family or dependents will need to cover their living expenses without your contribution. Consider the amount to cover:

  • Funeral
  • Mortgage or rent
  • Any outstanding debt
  • Living and household expenses
  • Child care costs and expenses, including your children's education.

Calculate how much money your dependents may need to continue their current lifestyle and cover their future expenses. Remember that you will not be in the equation, so there may be additional expenses. For example, if you are a parent who is not working or works part-time, additional costs may accrue because you are not present to care for children or an elderly parent. If your partner has a full-time job, you may need less work if you die to be there for your children or dependents.

how much does life insurance cost?

The average cost of life insurance varies, depending on the type of coverage you are looking for. There are several things that can affect the cost of your policy. These include:

  • Age
  • height and weight
  • Medical history (along with your family history)
  • Lifestyle (for example, drinking and smoking)
  • The amount of coverage
  • Duration of the policy
  • Salary