When it comes to keeping your finances oiled up, one of the key decisions you can make is to take out a good life insurance policy that will cover your loved ones if something happens to you. But what type of policy should you get?
Find out in this article the top five different types of life insurance plans worth considering! Remember, you can find all of these at Caspian Insurance at very friendly rates and terms.
With that aside, let’s dive straight in!
Whole of Life plan
Whole of Life policies (or permanent life plans) are the most comprehensive types of policies available. As their name implies, they provide coverage for a lifetime but that also means they come with higher premiums than other types of plans.
The main draw of a Whole of Life policy is the peace of mind it provides: if you pass on while the plan is in effect, your family will receive a payout regardless of how large the policy is.
However, these policies also have some significant drawbacks. First, they are often not as cost-effective as other types of plans because they offer greater coverage. Second, they can be complex to understand and compare, so make sure you fully understand all the pros and cons before choosing one.
Term life policy
Term life insurance is a great way for you to provide your family with guaranteed financial protection in the event that you pass away. As long as you are within the contract term, this type of policy will provide coverage for your spouse, children, and/or parents.
A key advantage of taking out a term life policy is that your premiums stay the same throughout the term of the policy, regardless of how long you live. This is important as you’re able to know exactly how much money you need to save for your designated period of time.
Critical illness cover
This type of life policy pays out a tax-free lump sum if you are diagnosed with a critical illness from a defined list included in your policy. As such, it is targeted at people who want to protect their income in the event of an illness or accident that prevents them from working.
It can also be a good option for people who want to ensure that their loved ones are financially secure if they are unable to work.
There are a couple of things to note when taking out critical illness cover:
First, it’s important to know what illnesses qualify as critical; luckily, the policy will list these illnesses and their definitions.
Second, you will have to decide how much coverage you need. A typical policy covers continuous coverage for a period of up to five years.
Income protection
Like critical illness cover, income protection insurance can be a valuable safety net if you can’t work because of an illness or injury. The policy will pay you a regular income until you return to work or the policy expires.
A few things to keep in mind when shopping around for an income protection insurance include:
Make sure you understand the coverage that is available to you. Most policies have general categories such as illness, accident, or disability but each policy may have different exclusions.
Don’t wait until something bad happens to get income protection insurance. If you’re able to afford it, getting coverage before you’re unable to work can improve your chances of getting full benefits.
Check with your employer or human resources department to see if they offer any benefits, such as paid leave or medical insurance that may extend beyond the time you’re projected to be out of work.
Mortgage life insurance
When you take out a mortgage, you put your family’s future on the line. This is why it’s important to have a plan in place in case you leave without having paid it off.
One way to protect them is by taking out mortgage life insurance. This policy pays out if you pass away within the term of the contract, which means that your family will not have to worry about losing their home.
When choosing a mortgage life insurance policy, be sure to compare rates and coverage options. It’s also important to ask about the specifics of how the policy would be paid out as terms may vary depending on the insurer.
Conclusion
When you’re shopping for life insurance, there are a few things to take into account. For starters, it’s important to know that no two insurance policies are the same. So take your time comparing different options to find one that meets your specific needs.
Also, keep in mind that not all life insurance companies offer every type of policy, so don’t be afraid to ask about what’s available before making a decision. Good luck!
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