Life Insurance
In the vast expanse of life, we are but mere travelers on an uncertain path. Each step we take carries with it a myriad of possibilities and risks, as if treading upon a tightrope suspended between towering skyscrapers. In this precarious journey, where unforeseen circumstances can derail our plans in an instant, it becomes imperative to seek protection and security for ourselves and those who depend on us. Enter life insurance, a shield against the unpredictable storms that may lie ahead.
It’s designed to ensure that your loved ones, who you leave behind when you’re gone are well catered for financially. There are many reasons why you might need insurance and you should consider all of the possibilities. It also ensures that they do not inherit your debts for your home, credit cards, or any personal loans.
Understanding Life Insurance
Life insurance is a complex financial product that provides protection and security to individuals and their families in the event of death. To fully understand life insurance, it is important to explore its various components and mechanisms. Firstly, life insurance policies involve an agreement between the policyholder and the insurer, where the policyholder pays regular premiums in exchange for a sum assured that will be provided to beneficiaries upon their death. Additionally, there are different types of life insurance policies available such as term life insurance, whole life insurance, and universal life insurance. Each type has its own unique features and benefits which should be carefully considered before making a decision.
Furthermore, understanding the concept of underwriting in life insurance is crucial. Underwriting involves assessing the risk associated with insuring an individual’s life based on factors such as age, health condition, occupation, and lifestyle choices. This evaluation helps determine the premium amount that needs to be paid by the policyholder. Moreover, it ensures that individuals who pose higher risks pay higher premiums compared to those with lower risks. Understanding this process can assist individuals in selecting an appropriate policy tailored to their specific circumstances.
Recognizing the importance of beneficiary designation is essential when considering life insurance. A beneficiary refers to the person or entity who receives the death benefit from the policy upon the insured’s demise. The policyholder must clearly designate beneficiaries during his/her lifetime to ensure that funds are distributed according to their wishes after death. Furthermore, keeping beneficiary designations up-to-date is crucial as changes in personal circumstances may necessitate modifications.
If a child, spouse or parent depends on you, then you need life insurance
Discussing life insurance may not be the most exhilarating conversation, but it is necessary and important. You do not want your loved ones to be left with your debt or to be in danger financially after your death. These are just two of the many reasons why this insurance is essential.
Why It's Important
Life insurance is an affordable way to help your family and avoid financial suffering if the worst happens. It’s a sad reality that one child in every 32 will lose a parent or guardian while under 18 in New Zealand. Grief and despair are often followed by the loss of an income and financial hardship for the entire family. What’s important is making sure you get the right policy, not overpay but yet get the best benefits. New Zealand has many sad examples of families overpaying $10,000+ over the life of policies, which often don’t offer the best benefits.
Key Features
Death from All Causes
Policies pay out upon death from all causes including diseases, accidents or illnesses
Critical Illness and Disability
Apply for extra coverage for cancer, heart disease and other critical illnesses or total or partial disablement
Global Portability
Worldwide cover. Continue this policy as it will cover you even if you move internationally, including your home country
COVID
Policies insure against death due to COVID-19 as well as all other illnesses and diseases.
Pre-Existing Conditions
Some policies allow pre-existing conditions. Your condition could be included with no extra charge in most cases
Level Premiums
Lock-in your price now for the duration of your term with term life-insurance
Which type insurance is right for you?
Term Life Insurance
Simple, low cost insurance where a specific ‘term’ or length of the plan is selected at the start of the policy. The insured amount is payable if death occurs during the term selected. This covers death from all causes.
Terms are chosen at inception. So long as premiums are paid & the claim is valid, the insured amount will be paid on death. Premiums are fixed for the duration of the plan. Rates will not increase with age.
Whole of Life Insurance
Compared to Term, Whole of Life Insurance has no specific term or end date. With whole of life insurance, the policyholder is covered for the whole of their life.
This will guarantee to pay the insured benefit so long as premiums are paid & the claim is valid. Payments are made throughout the plan or can be condensed into a 10-year period.
Universal Life Insurance
Universal life Insurance is a type of permanent insurance. With a universal life policy, the insured person is covered for the duration of their life as long as they pay premiums and fulfill all other requirements of their policy to maintain coverage.
Like many permanent life policies, universal life insurance combines a savings component (called “cash value”) with lifelong protection. When you pass away, the policy’s death benefit is paid out to your beneficiaries.
Annual Renewable Term Insurance (ART)
ART is designed for those looking for short-term insurance coverage.
ART is available on an annual basis with the possibility of renewal and is ideally suitable to protect people who are between jobs, who want to improve their health before locking in a longer-term policy, or those with short-term debt.