Life insurance is one of the most important aspects of financial planning, but understanding insurance and buying the right product isn’t always the easiest task.
How does one make sense of all the options out there?
When your family’s financial future is at risk, knowing which policy is the best for your particular situation is essential.
Most people rely on the expertise of an insurance advisor, broker, or sales representative to help them make the right decision, but this isn’t foolproof. Some are biased, or will manipulate you into buying their product for their own benefit.
All you need is a guiding hand to assist in determining the best life insurance scheme. Contact FRANK.NET today to find out more about choosing a life insurance policy in South Africa or to get a free quote.
5 tips to help you pick a life insurance plan
You don’t want to run blindly into buying a life insurance product that you aren’t 100% sure of. Here are some steps you can take to ensure you get the right product for the right price:
Know your needs – You are the only person that fully understands your financial situation. Avoid letting someone else tell you how much life insurance you need. There is a simple formula for working it out: add your debt, projected funeral costs and six months to a year of salary replacement together. This will give you a guideline for how much cover you should invest in.
Find the right plan – Once you’ve got an estimate of how much life insurance you’ll need, it’s time to consider the type of policy that best suits your requirements. These days, life insurance is available in many varieties, but there are four basic types: term, whole life, universal life and variable life insurance.
Acknowledge that insurance is not for investment – Term insurance provides protection only – without a savings component. Whole life and universal life policies have a savings component and are much more expensive. You are almost always better off just paying for term insurance, and using the cost savings to invest elsewhere.
Don’t be scared to ask questions - Know the insurance product inside-out before investing money into it. Is the product renewable? Is it non-cancelable? How long are premiums guaranteed for? What are the exclusions? These are all important questions that shouldn’t be ignored.
Compare similar policies - When you’re price shopping, compare the prices of similar insurance products to best determine the perfect policy for your requirements.
FRANK.net offers life insurance plans that can save your family from being stuck in a tough financial situation when you die. Contact FRANK.net today to get a free life cover quote!
