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July 15, 2013

Why Income Protection Is Important In 2013

Income protectionMost people know how important it is to have life insurance and to protect your assets, but an often overlooked aspect is protecting the most important asset you have – your income.

Most people heavily depend on their monthly income to provide for their family, pay off loan debts and keep up with other financial responsibilities.

The important thing to remember is that you can never know what could happen – and have to be prepared to handle your family’s financial situation if something were to go wrong.

Just ask yourself a few simple questions – what would you do if you’d become ill and wouldn’t be able to work for a few months? Would you still be able to provide sufficiently for your family?

A month or two may not seem like a lot of time – it could be a relatively minor mishap as a severe case of the flu or a broken leg, something that would keep you from working, and that could still have disastrous consequences on your family’s financial state.

What about an even worse scenario – if something was to happen to you and you wouldn’t be able to work again, either because of a permanent injury or death – how would you provide for your family?

Also, would you be able to set up your kids for their future – pay for their education?

Think about these questions and then it will become clear to you if you need health insurance. Basically, if you don’t have a really significant amount in savings and are dependent on your consistent income to meet all of your financial responsibilities, income protection is one of the most important things in making sure your family will be taken care of, no matter what.

There are plenty different plans you can choose from, but you should make sure that you got all the possible scenarios covered.

That includes short term income replacement – when you would be insured for the full or at least a significant amount of your monthly income and would be compensated for the period that you’d be unable to work.

You also need insurance in case something were to happen that makes you unable to work ever again – your family would have to be provided for, so insurance with a payout in the case of disability of death is also very important.

Finally, consider that not all expenses are direct – for instance, even if you wouldn’t consider your children’s education a regular expense, you still have to save money in order to provide for them, so you have to have an income protection plan that would cover the costs that will arise in the future – that, for instance, if something were to happen to you, your children would still get the proper education.

These are just a few examples of why income protection can be such a valuable asset – after all, in the year 2013 you can never be sure about your financial situation because of the still unstable economy, so protecting your family in as many ways as you can is critical.

Income protection is just another way of getting a little safer – this way you can create at least a few safety nets that will cushion the financial hit if something unexpected were to happen.

Romayne Warner is a full time self-employed blogging fanatic. Obsessed with finding small ways to save money every day, she enjoys sharing her frugal lifestyle tips and tricks with the world, she regularly writes about saving money.

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February 14, 2013

What Kind of Cost Life Insurance Has

Life insuranceIf you are considering purchasing a life insurance policy in order to protect your family in the event of your own untimely demise, there are a few different types of plans that need to be taken into consideration. Each has their own pros and cons, and covers you in a variety of different types of situations. Several of the more common types of life insurance policies that you should study in-depth include;

  • Term Life

Term life insurance is the most basic form of life insurance that currently exist. You purchase coverage for a price, for a specified amount of time. If the individual that owns the policy were to die at any point during that time, the beneficiary of the policy would receive the value of the policy. It is easy to see why term life insurance has become a popular option for individuals that want to secure their family in the event of their untimely passing.

  • Whole Life

Whole life insurance is actually very similar to term life insurance, but differs in one major aspect. Instead of only covering you for a specified amount of time, whole life insurance actually covers you for the entirety of your life. With the purchase of your policy, premiums for whole life insurance will remain constant throughout the life of the policy.

  • Universal Life

Universal life insurance is another common type of insurance that is offered by a wide variety of different companies. Universal life differs from the other options because it allows you to place any amount into the plan, over a set minimum premium amount. The company will in choosing investment vehicle, usually consisting of bonds and mortgages. The returns from these investments going to cash value account, which you can use against premiums, or allow you to build upon your policy. Depending on the type of universal life insurance policy that you choose, the beneficiary you may receive different types of payouts, with the most common type of payout being the face value of the policy based on the investments and premiums.

  • Variable Life

Another common type of life insurance is variable policy life insurance. With variable life insurance, there are going to be a wide range of different investment products that are available to you, including stocks that allow you to grow your life insurance fund for your beneficiary. Returns on investments can offset the cost of premiums with these plans, and beneficiaries usually receive either the face value of the policy, or the face value of the policy plus part of the proceeds found within the cash account.

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December 4, 2011

What are the best life insurance quotes

Before you can find the best life insurance quotes, you may need to reflect on what it is that you mean by best.

For example, are the best life insurance quotes those that are the cheapest or would you consider a policy which offered the highest lump sum pay out, to be the best?

Types of cover

While the basic principle of a lump sum payment to your family should you die remains the same, there are different types of life insurance policy available. There are also a number of ways that you may typically tailor the type you choose to match your own particular set of circumstances.

So, for example, you may opt for a policy that has:

• a lump sum payout, which decreases over time to tie in with a repayment type mortgage where the balance outstanding also decreases with each repayment you make – this is a decreasing term policy.

• a lump sum agreed at the outset of the policy and which doesn’t change over time – this is called a level term policy.

It may be worth noting that for either of these options, the monthly premium is likely to remain the same over the term of the policy.

You may also be able to combine this type of cover with critical illness insurance, which may provide a lump sum in the event that you are diagnosed with a life threatening illness.

Options

Once you have chosen the type of cover that you’d like, you may then need to choose:

• how long to you want the cover to last (the term of the policy) and this might correspond to the length of time your mortgage has to run or how long you have until you retire etc.

• the amount of cover you want (the size of the lump sum) – again, this may be tied into the amount of mortgage you have outstanding or an amount to provide your family with a bit extra once all the major bills were taken care of.

Premium prices will vary depending on the options that you select.

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