Its all Insurance
What is insurance excess?
Its all Insurance October 04, 2022 By Budget Insurance
Life insurance is an important part of responsible financial planning. It safeguards your loved ones from the financial uncertainty that comes with serious illness, disability or death. But the level of protection you need will change throughout your life and you’ll need to periodically update your policy.
What is life insurance?
A life insurance policy is an agreement between an insurer and a policyholder. The policy guarantees a payout to named beneficiaries when the insured person dies. When you take out a life insurance policy, you agree to pay premiums to keep your coverage intact. Your policy needs to be able to cover your debts (plus interest) and replace your income. There are helpful calculations you can use to work out the minimum amount of cover you need. But there is no “one size fits all” policy.
When deciding on the terms of your policy, you need to consider a few things. Firstly, think about your risk profile. Factors like your age, gender, occupation and health will have an effect on your monthly premiums. Secondly, you need to look at the reliance of your beneficiaries on your income. These factors are not fixed – they change throughout your lifetime. So it only makes sense that you should re-evaluate your life insurance needs at different life stages.
Newly married
Marriage is a legally binding contract between you and your partner. This makes it an ideal time to look into joint life insurance for married couples. In the unfortunate event something happens to either of you, then your policy can help the surviving spouse maintain their lifestyle.
During a divorce
Just as the start of a marriage is a good time to look at your life insurance policy, so is the dissolution of a marriage. Whether you need more, less or a similar amount of insurance will depend on how your divorce has changed your financial obligations.
Timely decisions must also be made with the beneficiaries on your life policy. If you don’t have children with your spouse, then you can simply change the beneficiary on your policy. But if you do have children together, then there are more factors you need to consider. List your children as your new beneficiaries, especially if they are still under the age of 18.
Starting a family
Any parent wants to make sure that they can provide for their children in every possible way. Life insurance for children is a great way to protect their financial future. Review your policy and ensure that your children are listed as beneficiaries. Remember to inform all your beneficiaries of your policies and how to claim from them.
Before retirement
Your responsibilities don’t retire when you do, and insurance is especially important at this stage of life. If you have an extended family spanning over multiple generations, then you need to make provisions for these beneficiaries in your policy.
If you still hold some debt as you move into retirement, then life insurance and retirement annuities can cover this in the event of your death. It’s also worthwhile to consider a funeral plan in addition to your life insurance policy. This will cover all the expenses associated with laying a loved one to rest.
Budget Insurance is a licensed non-life insurer & FSP
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