Life insurance: Who will take care of your family and obligations when you die? Where will your funeral expense money come from? Who will make up for your contributions to a church or charity when they stop due to your death? How will your key employee be able to buy your business from your family without financial hardship?
Life insurance is the answer to these and many other financial issues. It is still one of the best bargains in insurance. We have a wide variety of companies to choose from. If you have had health problems that may cause your qualification for insurance to be more difficult, we have the markets and experience to get you the best offer. Don’t believe that answering a questionnaire on the Internet will yield the lowest rate. The fact is, there is still no substitute for discussion by an experienced agent with you and the insurance company underwriter. We can help you decide on the right type of life insurance policy and make important financial plans for your situation.
The main purpose of life insurance is to maintain the same financial position for the beneficiaries had the event never occurred. For example, if a father was the only income generator of his household, he and his wife had a mortgage on their house and they had two kids, it would be important to have enough life insurance cover on the father to replace the income that was lost as a result of his death. Often financial advisers will give advice to have the life insurance pay out the mortgage and leave enough of a lump sum to provide a reasonable income stream from the interest of the lump sum without eating into the capital of the lump sum.
Critical illness Cover
Also known as crisis insurance or recovery insurance, is also a lump sum payment however the lump sum benefit is paid out at a specific event (i.e.: a listed trauma). Traumas are the major life threatening events that often occur and potentially reduce an individual’s life span. The most common traumas are heart attack, stroke & cancer but each insurance company has its own list of traumas with some having only 8 traumas and others having above 60 listed traumas. Most companies would have 40+ listed traumas.
Income Protection Insurance Cover
Also known as salary continuance, income protection (IP) is a monthly payment to the life insured that is paid where that individual cannot perform their occupation do to sickness or accident. Income protection covers a maximum 75% of an individual’s annual salary but paid in monthly installments. Income protection premiums are also tax deductible.
There are an enormous amount of variables that affect the premiums for income protection and ultimately those variables will be explained by the financial planner. As a guide the main distinguishing features that need to be understood before making a choice as to what product is best for an individual are the benefit period, the waiting period, and whether the policy is an agreed value policy or an indemnity policy.