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Life Insurance and Income Protection – Frequently Asked Questions

Some people have second thoughts about protecting themselves with Life Insurance and Income Protection as they find them unnecessary, only to realise later on that it can provide them and their families with the financial assistance that they need. Life Insurance and Income Protection are two of the most common types of insurance. Sickness, accident, and death can strike anyone, anytime, so it would be really helpful to get covered.

Why should I get covered?

As mentioned no one can tell when sickness, accident, or death may occur, so it pays to be prepared financially . Although savings can also help in difficult times, you won’t really know if these would be enough to cover all the expenses like medical bills, post-recovery expenses, utilities, and other basic needs. This is where Life Insurance and Income Protection come into play. Life Insurance, for one, provides a lump sum payout to the policyholder’s beneficiaries in the event of his death. So this basically means that if you’re covered, your family won’t have to go through a financial turmoil when you are gone.

Income Protection pays a regular sum of money, up to retirement date, to the insured in case he or she becomes incapacitated to work for a certain period due to sickness or accidental injury. This, however, does not cover 100% of your income, only a portion of 75%, and can be paid weekly or monthly, depending on the policy. Such amounts could definitely help your family pay for expenses while you focus on recovering.

Who should consider getting Life and Income insurance?

Anyone who supports a family and is concerned about how their loved ones will cope financially in the event of sickness, accident, or death should consider getting covered. With these types of insurances, you will have peace of mind. So whether you are a young adult or adult it sure makes sense to have Life and Income Protection insurance coverage.

What type of life insurance should I choose?

There are different types of Life insurance available, but the two main types are the Term Life and Whole Of Life. Term Life is a life coverage only, which means that in the event of death it pays a lump sum amount to the named beneficiary. You can choose the period of coverage you want – it can be as short as 5 years or as long as 30 years. Whole Of Life on the other hand, is one that covers you during your entire life. The main difference is that it has an investment component. Now, which one to choose? It all depends on you – make sure to consider your needs and your paying capacity before you decide.

What is the ideal waiting period for my income insurance policy?

There’s a wide range of waiting periods that you can choose from. But you have to note that the shorter the waiting period of your policy, the higher the premiums will be. So if you are on a limited budget, make sure you consider this. But there’s also a drawback if you choose a longer waiting period. The longer your waiting period, the more time you need to cover expenses on your own in the event of loss of income due to sickness or injury. So, what’s the ideal period to choose then? Well, it depends on how much you are capable to spend for your medical and living expenses before your first benefit payout. If you think you have sufficient savings, then you may opt to choose longer waiting period.

How can I find the best deal on Life insurance and Income Protection?

Just like when you buy anything it’s very important that you shop around and compare your options before buying. Free quotes are widely available online – all you need to do is provide your personal information and submit your request. Once you’ve gathered quite a number of insurance quotes, take the time to compare them based on features, premiums, coverage amount, and other inclusions. This will sure help you get the best deal that is right for your needs and budget.

I’ve difficulty making ends meet, so how can I afford to get cover?

The answer is simple – choose a policy that has low premiums but still with the right coverage that you need. But to ensure that you get these low rates, buy while you are still young and healthy. And if you smoke and drink alcohol often, better make the necessary lifestyle changes to improve your chances of getting cheap insurance coverage.

How much cover do I need?

Well, it all depends on how much you are willing and capable to pay for premiums and how much money you think your family would need to cope financially in an event. It’s very important that you determine this prior to buying, so you dont end up paying for the cover that you don’t need. If you are having a hard time coming up with an estimate, you can always seek advice from an insurance broker, so he or she can help analyze how much coverage is right for your particular needs.

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