The cost of funerals can come as a nasty shock to families when they do not have adequate life insurance. Funerals are the same as any other service and prices can be expected to rise each year. You need to consider how you can prevent your family and loved ones from being faced with a financial burden when you die and that does mean a life insurance policy.
There are various policy options for this type of cover, which require some explanation to ensure you choose the right option for you and your family. Factors which may help to determine the best policy for you will include your age, occupation, health and affordability. All these factors are taken into account by an insurer to determine the level of your premiums and any amounts to be paid when you die.
You are usually required to attend a medical practitioner for an assessment of your health. If you have any underlying medical conditions, you do need to declare them. It can affect the cost of your insurance, but does not necessarily exclude you. The cost will be based on how much of a risk you present the insurance company, compared to someone with no health problems in the same age range.
The risk factor for some types of diseases with a poor prognosis could make the premiums exorbitant and well out with the reach of some individuals. If you are in one of the life insurance excluded categories, you may not be able to take out this type of cover. However, you should always talk to your financial adviser about other options to help pay funeral costs.
Other factors an insurer considers when assessing your risk level are your occupation and your hobbies. They categorize occupations according to risk based on historical accident figures. They apply the same principle to your leisure pursuits, and you should be aware that taking part in high-risk activities is likely to increase your life insurance premiums.
A convertible term policy requires you to undergo a medical examination as part of the qualification process. The premiums are usually less expensive than a full life policy. However, the policy holder can apply to convert to a full life policy at a later date when their finances allow. They are not usually required to undergo a further medical.
Some individuals are tempted to take out life insurance that will provide a large amount when they die. Although they can afford the premiums at the time, it is better to be realistic. Ensure that you will be in a position to keep up the payments if your financial circumstances change in the future.
Breadwinners, have a quick look at our website for a summary of the factors that affect life insurance rates and guidelines on how to calculate how much life insurance cover you need, now.
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