“Life may seems to be like a chocolate box, but buying life insurance is more like to order for coffee at Starbucks,” Chief Executive Officer and President of Life Happens, Faisa Stafford once said. The respected businesswoman again said “there are so many options to consider when buying life insurance but it’s just hard to know what to get.”
Life insurance comes with so many advantages to the person who secures it. With life insurance, one cannot go through financial problems when he or she is befallen with accident or sickness. It is indeed very important for everyone to have a life insurance cover.
Now, what is Life Insurance?
First of all, let us understand what the term life insurance means. Life insurance is a written agreement between a person and a legally operated insurance company and it is intended to be enforced by law. Life insurance companies usually pay some amount of monies which is termed Death Benefit to a relative who happens to be the beneficiary of a person who insured his or her life.
The most common types of life insurance that we have are; the term life insurance and permanent life insurance. The whole life insurance and the universal life which fall under ‘permanent’ life are lifetime life insurance whilst the ‘term’ life insurance covers a person for some period of time and according to Insurance Barometer, it is the most affordable type of life insurance to consider when buying life insurance.
It is understood that the permanent life insurance is more expensive than the term life insurance according, and this is according to Insurance Barometer. A study proves that the confusion as to the type of life insurance to buy and the amount to buy are the main reasons people give often give up on insuring their lives.
To help people to make the right decisions regarding the purchase of life insurance, and to prevent them from getting confused further, The Punch Ghana brings to you the three (3) most important factors to take into consideration when buying life insurance.
- Know your financial position or status
One must take into consideration his or her financial capacity before choosing the type of life insurance. This is very important because one may later realized that he is not well prepared. The retired and aged persons are the ones that need to take this factor into serious considerations.
- How much life insurance to buy
One needs to know the amount of life insurance he or she needs to purchase so that he or she does not purchase so much or too less life insurance for him or herself. People tend to think only about the amount of money needed to settle their big debts, whilst the amount of money needed to assist a partner settle bills and pay children’s tuition or any long term needs.
- What may affect your life Insurance rate
Health and age are the most important things insurance companies consider before determining the rate a person must pay for coverage. The rate you pay also depends on the policy type you get and how enough the death benefit is.