How to go about choosing the right life insurance policy

Wednesday, February 3, 2010

With so much competition in the market, the consumer is given a huge amount of choice when it comes to life insurance products. Then why is it that so many people still do not have the policy that best accommodates their needs? Here are a few steps that will help you in choosing the right policy.


Always review!

As a person’s life changes, so to do their needs when it comes to life insurance. It stands to reason that your policy should reflect this. Then why it is in a recent study, one third of people hadn’t reviewed their policy in the last five years? The practice of reviewing a policy regularly should simply be a matter of course.


Watch out for tax relief incentives

Many people are coerced into buying life insurance at the same time as establishing their personal pension in order to take advantage of the same tax breaks as their pension premiums. This can be detrimental due to the fact that it can often be more expensive than buying the same policy direct from the insurer.


Look into critical illness insurance

It will generally be cheaper to combine this with life insurance so that it pays out if you either survive critical illness or if you should die.


Is a joint life insurance policy right for you?

These policies may be cheaper but they also don’t pay as much. Separate policies may end up being more beneficial in the long run! Also since joint life insurance policies pay out once the first person dies they can also leave the beneficiary uninsured late in life when premiums have significantly grown


Always make sure your insurance policy is “in trust”

Ensuring your policy is in trust means that when you die the money will go directly to the beneficiary. Otherwise as much as 40 percent of the payout will be subject to taxes of your estate because of the inheritance tax regulations.

These are just a few simple steps that will insure that you get what want out of your life insurance policy.


Gary Page