Life Insurance is all about protecting your future and that of your family/dependants. Life Insurance nowadays is more fashionable because there are many products that involve benefits being payable even before death. There are products for family, kid’s education, capital accumulation, thrift savings plan and so on.
No matter the type of cover you choose, factors ranging from your needs to your age and much more will determine your premium. This post is coming with a purpose of enlightening you on how to purchase a cover that will be of benefit to you.
How To Choose A Life Insurance Plan
1. DETERMINE YOUR NEED
Before you fill the proposal form or issue your cheque, the first thing to do it to determine exactly what your need is. How to do this is to look within. Answer basic questions like:
Are you single or married?
Do you have kids and how many?
What are your running expenses?
Can you afford to keep paying the premium?
It is essential to answer these questions because life insurance involves premium payment which is periodical. You are to estimate your living expenses and add the insurance premium and see how it goes. It is important because once you start should be able to sustain your payment without which you will not be able to reap your full benefit. Also answering these questions will go a long way to help in this next step below.
2. MAKE YOUR CHOICE
There are different life insurance covers available you can choose from. Here are the basic plans: Term assurance, whole life assurance and endowment plan.
Term Assurance: provides cover for a specific period and will only pay out if the life assured dies during the period. It is the most basic of all life assurance policies. However, if the assured survives, no payment is made and the policy expires. There are different types of term assurance:
Level Term Assurance
Renewable Term Assurance
Convertible Term Assurance
Increasing Term Assurance
Decreasing Term Assurance
Family Income Policy
Increasing Family Income Policy
Unit-Linked Term Assurance
Whole Life Assurance: is a very simple policy which pays out whenever the life assured dies. This is different from Term Assurance because it is a permanent policy, hence it does not expire. It is more expensive. Whole life is a substantive policy and can be used as security for loans. There are different types of Whole Life Cover:
Non-profit Whole Life Policy
With-profit Whole Life Policy
Low-Cost Whole Life Policy
Single Premium Unit-Linked Whole Life Policy
Regular Premium Unit-Linked Whole Life Policy
Endowment Plan: Allows the sum assured to be payable on a fixed date – the maturity date – or on the life of assured’s earlier death. What this mean is that if the assured did not die, the payout will go to him but if he does, it goes to his beneficiaries. Endowment policies are substantive policies because there will be payout at a point in the future and can be used as a security for loans. The following are the types of endowment policies:
Read More : http://how.com.ng/how-to-choose-a-life-insurance-plan-in-nigeria/