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one of us want to think about dying, but we should consider the future of our families. Life insurance provides a set amount of money for your loved ones should anything happen to you. There are loads of different types of life insurance policies. The one you choose depends on your needs and the amount of cover you require. Here's everything you need to know.
The Types of Life Insurance Policies
Term Insurance
This is one of the more common policies and protects your family for a certain amount of time. They are valid up to 25 years after you take out the policy but there are restrictions. If you die after the set time period, no money will be paid.
Level Term Insurance
If you want your family to receive a fixed amount of money then you should look into level term insurance. It guarantees the amount that will be paid, giving you peace of mind.
Decreasing Term Insurance
Decreasing term insurance payouts get lower over time. If you take out a policy and pass away ten years later, the amount of money will be less than five years before. These plans are usually cheap due to the decreasing payments, but you should check your family will be protected.
Increasing Term Insurance
Increasing term insurance is the opposite of decreasing term insurance. It's often more expensive due to increased payments, but it can give your family extra security.
Things to Consider
The Length of Your Term
You can decide the length of your term by factoring in any health issues you have and long-term financial commitments. If you have young children you should go for a longer term and consider how long your debts will take to pay off.
How Much Cover?
Again, there's no right answer here. Your level of cover should be based on how much your family will need to be financially stable and how much you can afford. The biggest concern for people is how their loved ones will continue paying off a mortgage. If you've paid yours, then you can go for a cheaper policy with less cover.
Which Insurance Company?
There are loads of insurance providers around, and they cater to different needs. You should always use an online comparison check to find the best policy. Remember, life insurance is meant to give you security and provide for your family. Research online to see which providers can offer you a reasonably priced policy.
