Things to Consider When Buying a Life Insurance Policy
Life insurance, also known as death cover or income protection, plays an essential role in personal financial planning, protecting you, the insured, against life’s uncertainties, such as sickness, disability, and untimely death. It provides a replacement for the loss of income brought about by the circumstances, minimizing the impact of your death on your beneficiaries.
Because of the financial protection and peace of mind that life insurance offers, it is essential to be critical of the policy you will be getting for yourself. Here are three of the things that you need to consider when purchasing a life insurance policy:
Amount of Coverage
Like buying other insurance products, you need to consider the amount of coverage you will get when purchasing a life insurance Ph policy. It is sensible to select a policy that will meet your needs and in consideration of your income, financial obligations, as well as liabilities your family is left with in case of your passing or sickness.
Policy Period
Apart from the amount of cover, a life insurance policy is defined by the period of coverage. Thus, this is also another factor you need to consider when purchasing a policy.
There are two basic types of life insurance: term insurance, which will give you coverage for a fixed period, typically five to 30 years, and has to be renewed, and permanent insurance, which covers you for your entire lifespan.
Two types of policy fall under permanent life insurance: whole life policy and variable universal life (VUL) policy. Both insurance plans provide coverage for the entire life of the insured and offer cash value potential. But, the difference between the two is that VUL provides a flexible premium, and its interest rate can change over time; unlike in whole life insurance, the policy premium and interest are fixed.
Insurance Provider Reputation and Financial Stability
The primary purpose of your life insurance is to provide you and your family peace of mind and financial protection in case of unfortunate events. Hence, it is best to look for a reputable and financially stable insurance company when purchasing an insurance policy. Consequently, there is no point in putting your trust in an insurance provider that has a negative reputation or does not have financial solidity, as you cannot have the assurance that they can pay you when you make a claim.
Select a company that provides quality insurance products and services, complies with specific regulations, and has excellent claims handling practices. To know how an insurance company interacts with its clients, you can look at reviews online left by their previous and existing clients or ask your family, colleagues, or peers who have taken out an insurance policy from them.
Conclusion
A life coverage plan can give you and your family peace of mind in unfortunate events and help settle immediate financial needs, such as funeral costs, healthcare costs, estate taxes, and unpaid debts. This can also lower the risk of bankruptcy for your family and lessen the need for them to sell assets to get a hold of money to pay off immediate and future bills.
Proper research and extensive life insurance comparison Philippines can help you find the ideal life coverage plan. Visit our website at iChoose.ph to see the best life insurance for your financial planning.
Read More: What to Look for When Selecting an Insurance Company?
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