Factors to Consider When Choosing a Life Insurance Policy

Factors to consider for life insurance

People purchase life insurance for different reasons. This is why there are also specific types of life insurance, such as.

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Term Life Insurance: This provides coverage for a specific period or 'term' of years stated in the policy. If the insured dies during or within the specified time period and the policy is active, a death benefit is paid to the beneficiaries. It is generally less expensive but has no cash value other than the guaranteed death benefit from the policy. cheapest health insurance in sharjah
Whole Life Insurance: This is a type of permanent life insurance. Here, the insured person is covered for the entirety of their life as long as their premiums are paid on time. It is the most popular type of permanent life insurance policy and offers a savings component or cash value.
Universal Life Insurance: This is another type of permanent life insurance. In this case, the insured person is covered their whole life as long as they pay premiums and fulfil other requirements stated in their policy. Universal life insurance has a savings component or cash value and provides lifelong protection. The policy also comes with a death benefit to be paid out to the beneficiaries when the insured person dies.

For most people, their primary purpose is to ensure the financial wellbeing of their family when they die.

If this is also your main objective, answering the following questions will help you calculate the ideal amount:

How much does your family need per year for household expenses?
How many years do you want to provide your family income to cover household expenses?
Does your spouse have a job? If not, would they work when you die?
If your spouse is employed, how much do they contribute to your household budget?
How many children are in school?
How much do you need to leave to fund for your kids' education?
How much do you owe in debt? Do you have any outstanding mortgages, loans, credit card or medical bills?
How much would be the funeral expenses when you die?
Do you have any savings or investments?

Moreover, the cost of your insurance could be affected by:

Your age
Whether you have any existing medical conditions
Insurance term
Amount of the death benefit
Whether the policy has a cash value

Generally, the younger you start, the lower your premiums. If you're healthy and a non-smoker, these can drive down the cost of your life insurance further.