Summary
It is always sensible to comprehend precisely what you need in the way of cover as only you are aware of your own situation. We clarify what you need to be aware of and how to maintain it once you have it.
Leon McDuff, a Director of investments at Brighton-based financial adviser 38 Finance Ltd, cautions that it is very irresponsible of people not to have Life Cover and/or Critical Illness Cover as he maintains that life has two potential hazards – either being alive too long and passing away too early. “Its absolutely vital to have some insurance cover in place – particularly if youve got young children,” he says. “These days you need to build your own little stronghold because nobody else is can do it for you.”
Paul Harris at LifeSearch says now is the ideal time to invest in such plans as there are lots of very cheap premiums around owing to the intense vying for business within the insurance market. “The cost of cheap life insurance has come down – gone down by about 42% in five years. It has never been as cheap,” he states. “The critical illness market paid out on 85% of claims in 2004 – growing from seventy nine per cent the previous year.”
Make sure you check what insurance cover you have before you take out more. Do you already have investment policies or does your employment pension fund give you any other insurance?
The simplest way to estimate how much insurance you need is to calculate how much you would need to provide the same level of living over a year and then times it by 24 years. The minimum amount required should clear all outstanding debts and and leave a decent amount for your dependants.
Obtaining the best deal
When making a decision on your policy it is very necessary to read the guide that most a lot of insurers have of the conditions and illnesses that they include. It will catalog everything and should be very clear and simple to grasp. You will also need to review the documentation of the main points of the cover which will include all benefits and exclusions.
When someone takes on the responsibility of a homeowner loan they are more often than not advised to take out critical illness insurance cover but should research the market and not just take the first insurance policy suggested.
If you begin paying these premiums when you are younger they are noticeably cheaper, distinctly different to leaving it until you are older, when cover rises quite substantially.
Insurance payments can also be reduced by giving up smoking. Mary Lakes, head of protection insurance at AxA Insurance says “Giving up smoking can save people a significant amount of money as well as hopefully bringing a longer and better quality of life.”
If you quit smoking you can take off as much as a quarter off life insurance, critical illness insurance and income protection insurance payments because the facts that we now have proves that smoking can cause severe illness and aggravates any other existing medical conditions.
You may have to change your policy if your circumstances alter.
Under no circumstances imagine that once you have bought your insurance policy that you can just keep on with your life and disregard it. At all times be very aware of the insurance cover you have and ensure that, should your circumstances alter, or, is going to alter your insurance policy must have capacity for these alterations. Perceivable examples are changing your job, or do you intend to have more children; on a regular basis consider anything that may increase your costs to live and must be to be covered if you are taken ill and are unable to work.