Welcome to Best Life Insurance Deals
What is life insurance and why you really need for it
Most people at some point in their life need life insurance. A life policy is a contract between an insurance company and a policyholder. The insurer agrees to pay a predetermined sum to the beneficiary of the policy when the life insured dies, in exchange for premium payments. The policyholder names the beneficiary of their policy. There can be more than one beneficiary and they will usually be a policyholder’s dependants. A life policy provides the life insured with the peace of mind that their family with be taken care off in the event of their early death.
Most people buy a life policy to replace income that would be lost should they die prematurely. Whilst the policyholder is alive and working their income is used to support their family, upon death, this income ceases. At this point, their life insurance policies will payout to provide financial support for the dependants left behind.
Another use for an insurance policy is to provide a lump sum to ensure that, even if the worst happens, a child can afford to attend university or have a deposit for their first home, in the future.
A life policy is designed to provide liquidity to a policyholder’s estate. Upon death, funds are released quickly. These funds can be used to pay for funeral expenses and/or to clear any debts.
Without life insurance, upon death of the insured, their liquid assets (cash and assets that can be easily converted into cash) will be used pay off any outstanding debt. Such debts may include a policyholder’s mortgage, car loan or credit card debts. This will be done with haste, thus the true value of these possessions may not be received. If the cash rise from the sale of these assets is not enough to clear the debt, some illiquid assets (property and assets that cannot be easily converted into cash) will also need to be sold. This may include the family home. An insurance policy allows a family who has already lost their loved one to avoid this further distress of loosing their possessions.
Once any debts and funeral expenses have been paid off, without a life insurance policy in place, it is unlikely that there would be any assets left for the deceased’s children and/or spouse.
With a policy in place, remaining family members may be left with a cash amount and/or assets of value. For people who do not have any dependants or family, a life policy may be used to donate funds to a chosen charity.
The best way to look for a life insurance policy
When looking for a life policy, there are many types of cover available. Cover may last for a specified duration or for whole of life. A life policy may just provide basic life cover or added features can be selected, such as a savings facility, critical illness cover or waiver of premium. A policy may insure a single or joint life.
When an insurance company is assessing an application for life cover, they will need answers to a number of questions. These answers will determine the premium offered. Such questions will include the age and occupation of an applicant, as well as whether they smoke or exercise.
Life insurance may be applied for online. Once the level of cover needed has been decided upon, it is worth contacting at least six or seven providers. Policy features and costs should then be compared to ensure a shopper secures the best value deal to suit their needs.