Life Insurance. Most people don’t want to talk about but protecting your loved ones and not leaving them with a financial burden is one of the most important things we can take care of before we go. Typically, we think of life insurance when a big event has taken place. It doesn’t have to be a health scare. Some think of it when purchasing their first home or welcoming a new member to the family. Here are some expert tips to help you choose the life insurance policy best for you and your loved ones.
Tip #1: Term Life vs. Whole Life Insurance
No insurance is one size fits all and life insurance is no exception. If you have already looked into life insurance you have probably encountered something called term life insurance.
Term Life refers to life insurance that is effective for a specific amount of time. Unlike permanent life insurance, also referred to as “whole life” that does not expire. Most people choose term life as the less costly option but there are some important points to consider:
If you choose a 15-year plan you will need to renew it once your 15 years are up. If you have developed a serious chronic medical condition however, you may not be able to renew your policy. Luckily, even in that situation, you still have the option of a Return of Premium. This can be bought for an additional premium, after which all paid premiums are returned to you.
Who Chooses Term Life Insurance?
Term life is a viable option for the following groups of people:
- People looking to cover one item such as a 25-year mortgage
- Covering children until they complete school
- Young people who can’t afford whole life insurance
- Unemployed spouse
Tip #2: Needs Analysis
This is an important audit that will review current debts, living expenses, and income replacement for your family. Once calculated this will allow you to see your ideal insurance policy and then with the help of your insurance broker, find an option that is best for you.
A needs analysis is fluid and over time, numbers will decrease and need adjustment as debts are paid down. In this case, choosing a trusted insurance broker will be critical as your term life plan changes throughout your life.
Tip #3: Flexibility
Choosing your life insurance policy can be difficult. Using an insurance broker that has years of expertise can help you arrive at thoughtful solutions that offer the flexibility you and your family need. Many ex-pats specifically choose Term Life Insurance in Hong Kong because of flexible options. Typically it is recommended to layer insurance policies together which is referred to as “laddering”. This allows you to have access to coverage when you need it.
Take Away
Always make sure to work with a licensed and reputable life insurance broker, like Trusted Union. Term life is a great option for people looking for a flexible short-term life insurance policy. Discuss the options with an expert and find out if whole life or a laddered term-life policy iis the right option for you.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.