When it comes to showing how much you care about your family, you can express it by offering them financial security in the event of your death. It could mean that they can continue to live in their home where years of memories have been made, that a stay-at-home parent might not be forced to go to work, that a surviving spouse may not have to take a second job just to make ends meet, and that a child's dream of a University education may be realised. That's the love and financial security that a life insurance policy can bring.
Life insurance is designed to provide financial protection for your loved ones in the event you were to pass away.
What is Life Insurance?
Life insurance is an agreement between you, and the insurance company, that they will pay your beneficiaries a tax-free lump-sum if you pass away and no longer around to provide for them. It can serve as financial protection for your loved ones who would lose your financial support in the event of your death.
How much life cover would you need?
Consider current needs as well as future needs for spouses, children and other loved ones that could use financial protection in the case of your death. As a general rule, you can calculate how much life insurance you need by adding your income (times the number of years you want to be protected) + your current debts + commitments (like education costs for your children and your final expenses) minus your liquid assets (like your savings).
Insurance companies use certain personal information to determine your risk profile, which in turn will determine the premium you will pay. Your risk profile depends on a number of different factors, including your:
• Age
• Gender
• Health status
• Tobacco usage
• Medical history
• Hobbies and lifestyle
• Family medical history
• Occupation
• Education
Applications for fully-underwritten life insurance policies will include some type of medical evaluation or exam for the insurance companies to check the factors listed above. The better your health, the more affordable your policy will be. Younger people, women and non-smokers have lower life insurance rates on average. The older you are, the higher your premium will be to reflect the greater risk to the insurer. Buying a policy while you're still young and healthy is a great way to save money in the long run.
It may not be romantic but shows your love by purchasing a life insurance policy to protect your loved ones in the future. Buying a policy now can help your family have a more financially secure future.
Ready to discuss your life insurance needs? A Financial Advisor is standing by to assist you with your life insurance plan.
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