posted May 16, 2012, 8:05 AM by Lance Robert
Here are five points to consider when taking out a life insurance plan. They are many more facts to consider and speaking to a financial planner will give you a lot of help in this regard but taking note of these 5 will certainly go a long way:
- Select the most comprehensive life insurance benefits available to ensure that you are paid out when you really need it. If your budget requires you to take on "lighter" cover make sure that you fully understand what cover you have, what isn't covered and when it will pay out.
- Make sure that your monthly income, after disability, is sufficient to maintain your lifestyle. The best way to ensure this is to have Lifestyle Protector's new Income Protection benefits which pay a monthly sum insured if you are occupationally disabled or impaired.
- Never assume that your disability pay out (or critical illness pay out) will cover your medical expenses. The intention of a disability policy is not to pay for your medical expenses, but to make provision for the loss of income that you will suffer as a result of being disabled or impaired. A good financial plan should therefore always include some form of medical aid cover.
- Consider the impact of both permanent and temporary disability. Lump sum disability products only pay if you are considered permanently impaired or disabled. Income protection benefits pay for both temporary and permanent disability or impairment.
- Having at least some cover is always better than having none at all. Retrenchment cover is relatively expensive, yet a very important benefit to have. If you cannot afford cover to adequately replace your full income if you are retrenched do not disregard this type of cover completely, rather buy an amount sufficient to meet your non-negotiable expenses such as your children's school fees, the mortgage payment, etc.