Tips for choosing a suitable life policy for your young family
Let’s face it; we will all pass away at some point. This is why planning for that day is something each of us should do regardless of age. Taking out life insurance helps your family stay financially secure in case you depart. Unfortunately, many young parents in the UK still underrate the value of this policy, assuming they’re too young to need life coverage.
For others, the problem comes with choosing a suitable option from the many policies available in the market.
Have you been thinking about safeguarding the future of your growing family? Securing a life insurance plan is probably the wisest decision you’ll make today. The good news is you don’t have to spend a fortune to get a good policy these days.
Caspian Insurance shares eight simple tips on how to choose a suitable life insurance policy for your young family.
Outline your needs
Life insurance cover comes in two major forms – term and whole of life.
Term life policies provide coverage for a specific period, only paying out if you pass away within that time. Whole of life insurance lasts for as long as you keep paying the premiums.
By outlining your specific needs, it becomes easier to determine which life insurance type suits you best.
Compare multiple providers – Tips for choosing a suitable life policy for your young family
As with any market, different providers offer varying rates for life insurance policies. This is why it pays to remain open-minded when looking for a suitable option. Check any differences in the rates even if they seem insignificant – this could have a notable effect in the long run.
Save more by buying cover while young
Age is a primary factor that insurers use when determining your premium rate. You can save significantly by securing life insurance at a young age when your premiums are still cheaper. The premise behind this is insurance companies consider you to be healthier and with many years ahead, hence less risky to them.
Things to note
When it comes to choosing a life insurance company, one of the rules of thumb is to check their experience – for how long have they been in business?
Although this may seem unfair to newer providers, it is important that you are dealing with a proven company with a good track record.
Also, check the annual claim/settlement ratio to know whether it’s credible. Put simply, check the number of claims that the insurer has settled vis-à-vis those raised by clients in the past year or so. The higher the ratio, the higher the chance you too will be compensated when the time comes.
A few other things you need to know before settling for a life insurance provider include;
This might sound like a no-brainer but the quality of support matters a lot when looking for the best insurance provider.
While most companies will try to address frequently asked questions on their official sites, you still need an efficient customer care team that promptly attends to your more personalised queries. We recommend checking comparison sites to gauge how responsive a company is or ask from those who already use the service.
Use the same insurer for your other insurance needs
Where possible, try to bundle several policies and buy them from one provider.
Most insurers are happy to offer a multi-product discount on your monthly premiums, which can help you save big in the long run.
Provision for accelerated death benefits
This means your insurer can allow you to receive your cover amount if diagnosed with a terminal illness, by which you are deemed to have less than 12 months to live. When choosing a life policy, check whether they provide clear guidance on accelerated death benefits.
Write your policy into trust
When setting up a life insurance cover, we highly recommend you do so under a trust. This allows you to specify those who should benefit from any claims. Furthermore, it is also an excellent way to circumvent inheritance tax.
Conclusion – Tips for choosing a suitable life policy for your young family
A life insurance policy offers one of the most reliable ways to support your family financially in the event of your passing. We hope this article will help you identify the most suitable policy for your needs. Most importantly, take action now by purchasing the cover while your family is still young to keep your premium contributions low.
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