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As you reach retirement age, there are a few things you need to consider seriously. For the most part, your retirement should already be taken care of so that you can enjoy your old age in peace. However, life insurance is not about you; it is about your legacy once you die. Obviously, you still have a good few years left before that becomes a reality, but you need to start thinking about it now just in case. You never know when a crisis can strike. Here are a few essential things you need to understand when you draw up your policy.
What Policy Is Best For Me?
Everyone is different because their circumstances differ. However, there is a lot of variety with insurance policies, and a life insurance comparison should tell you everything you need to know. Also, take a look at your life and see which policy correlates best. For example, most people tend to go with a term life insurance because it covers you for a fixed period. It is flexible because insurance companies will often reduce their premiums, so the payout decreases. Why would you do that? Mainly because you can offset against mortgage payments. Alternatively, there is a whole life insurance policy where the company will pay out whenever you die.
How Much Cover Do I Need?
Again, that depends on your situation. It is incredibly difficult to work out how much cover you will need on your own, so you might want to talk to an advisor. Their years of experience will be vital, as will a life insurance calculator to help you will the sums. Take into consideration how much debt you have and how much you contribute to the family’s finances. In layman’s terms, you will want to match that amount. However, the more cover you purchase, the higher the rate. It all comes down to how much you can afford to leave your family in the case of your death.
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Should I Have Joint Or Single Cover?
The joint cover option is good because it is cheaper. The premiums tend to be less, plus two people are contributing to the payments. But, joint cover only pays out once, so you won’t leave as much to your children when you die. Also, the insurance company pays out as soon as one partner dies, which means the other would be left with no cover. Is that sufficient enough cover for you and your spouse? Most people like to pay a little extra, so both the kids and the surviving spouse are more effectively covered.
Are They Liable For Tax?
Insurance policies are tax-free, but your family’s inheritance may be subject to tax depending on how much you leave. Talk to your insurance advisor because they may be able to negate inheritance tax by having your insurance policy written in trust.
Do They Always Pay Out?
Yes, in the vast majority of cases life insurance companies will pay when you die. However, if you fail to include vital information, they can void the policy and leave your family with nothing. The only other major cause of non-payment is fraud, but that should be fairly clear cut. Hopefully!
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