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Looking After Your Family: Health and Life Insurance
Taking care of your family’s health and wellbeing is not always easy. You need to make sure they eat a balanced diet and get plenty of exercise. The adults and teenagers should get 7-9 hours or sleep each night, with more hours for younger members.
And to make sure you can keep providing for them in the right ways you have to strike the right work/life balance. You want to make sure you’re bringing home the bacon, but your also want to spend quality time with your family, and not be too stressed out every night when you come home.
But even with the healthiest lifestyle and the best will in the world, you have to face the possibility that you may not always be around to care for your dependents. In this case, it’s important that you have adequate life insurance from a reputable firm. While it may seem like a daunting – and perhaps morbid – task, it’s one that must be undertaken if your family is to support themselves in the event of your death. To help you understand your options, here’s a brief guide to the various kinds of life insurance available…
Level Term Life Insurance
This version of life insurance maintains the amount to be paid out when you die, regardless of how far through the policy you are. So even if you’ve only taken out the policy 6 months previously, your family will be protected with the same sum as if your death occurred twenty years down the line. It’s perfect for those who have other financial obligations, as the payout will clear credit card debt and a mortgage and still leave money for other expenses.
Decreasing Term Life Insurance
A ‘Decreasing term’ policy means that the sum paid out will decrease over time, often in proportion to your mortgage. This option works well for those without much cash at their disposal, as the premiums tend to be cheaper. Just beware of the downside – if you die in debt, the policy won’t cover it.
Increasing Cover
‘Increasing term’ life insurance simply goes the opposite way to decreasing term by paying out more and more money the more time that passes between taking the policy out and passing away. The beauty of this system is that it allows for inflation, and covers your family for the more costly standard of living to which they have grown accustomed over time.
Joint Cover
A joint life insurance policy covers both spouses for the same amount, irrespective of which one dies first.
Critical Illness Cover
Critical Illness Cover is really smart if you can afford it, as it takes into account physical ailments that can have almost the same effect on your financial security as death. It pays out in the event of incapacity for work caused by serious illness. If you have to take a long time off work, your family will be covered for the same amount – or at least very close to the same amount - you were earning.
Last updated 14 June 2012