No one wants to think about their own mortality! Yet it’s really important, (particularly if you have dependents), to consider how they will be provided for financially in the event of untimely death or critical illness that may prevent you from working.
According to recent statistics, millennials will have a shorter life span than baby boomers. 1 in 4 20-year olds today will become disabled before they retire. This rises to a 50% chance of becoming disabled for three months or more by the time you are 35.
Covering everything from food and shopping to mortgage payments and funeral plans, life insurance is a way of providing peace of mind and financial security for your loved ones even after you have gone. In our quest to empower and educate millennial women, We have enlisted the support of the Money Experts to see how you can compare and save on life insurance.
How do you know which policy to choose?
Be clear in your own mind as to what you want the policy to cover and how long you want it to last for. There are two types of life insurance policy- level term and decreasing term.
A level term policy will pay out a fixed amount if you die within a set term. The term length is decided at the start of the policy and the pay-out stays the same no matter how far in to the term you get.
A decreasing term policy is used to cover a specific debt such as a mortgage. As for a level term policy, it is also over a set term but its value and pay-out decrease over the course of the term as the debt gets smaller.
Make sure that your policy meets all your financial needs and provides for dependents until they are old enough to be financially independent.
Do disclose any existing illnesses or smoking habits as these could invalidate your plan if not declared in advance. Plans are also invalidated by death due to drugs, alcohol or gross negligence.
Joint life insurance plans
You can take out a plan with a loved one or family member. This tends to be cheaper than two single policies and will pay out to the other person on your policy if one of you passes away.
What is critical illness cover and family benefit plans?
Critical illness plans will cover illnesses listed on the plan during the course of the term such as cancers, heart attacks or strokes.
Family Income Benefit pays out to your family for the duration of the term that is left after your death. It provides a guaranteed amount of money over a set amount of time rather than a lump sum.
To sum up, it’s important to have a life insurance policy that meets your needs and those of your dependents. Do seek expert advice and check the small print to see what is and isn’t included.