#4 What you need to consider

Insurance 101-Things to consider-Life Insurance

Life Insurance

Does the amount you pay for the insurance (the premium) stay the same through the years, or does it become more expensive as you age?

“Age-related” premiums start off cheaper but increase with age. “Level” premiums stay the same over the life of the policy, so may seem more expensive to start, but give you greater certainty over time. 

How long can the product or policy be continued?

Know when your product ceases, e.g. at a specific age, or after a specified number of years. Also, does your insurance company (the insurer) allow you the option to continue your cover after the cover ceases without having to update your current health status? If it does, will the premiums increase?

Will your policy pay out if you become terminally ill and if so, how early?

Being terminally ill means you have been offered or given treatment that either no longer helps, or the situation is so severe that no further treatment will extend your life. Ask for an estimate of what you might pay in premiums over the next 10 years. You may like to compare this with other insurers.

Understand the limitations (Exclusions) of your policy and what it won’t be paid out for. For example, missed premium payments, no payment within the first 2 or 3 years, your residency status, a specific health condition like HIV, suicide, any countries where there is war or terrorism, etc.