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Investment Life Insurance
Investment-type life insurance pays out if you die and if you don't. Whilst we all like the idea of a payout these type of investment policies usually cost a lot more than protection-only insurance. It is probably advisable to rethink before opting for this kind of insurance as it could be better for you keep your insurance and investment needs separate.
Some examples of investment life insurance are: whole of life insurance, with profit bonds, unit linked bonds, income and growth bonds, endowment policies.
Consider the following before taking out Investment Life Insurance:
- How long are you prepared to invest for, is there a possibility you will need to get to this money earlier before the term of the policy has ended.
- What is the total amount of money that you will be investing.
- How regular will the policy installments have to be made, and are they within your budget.
- How flexible is the policy, can you vary the amount you pay or if you can’t afford it for a while and wish to stop payments for time are you likely to incur any charges.
- What happens if you wish to move your investment to another insurer, will there be a charge.
Non Investment Life Insurance
A policy is taken out for a specified term, should an unforeseen death occur within that time, then a lump sum would be paid. Consider:
- What is the maximum and minimum amount of cover you can get, always ensure you get the right amount of cover for yourself.
- What are the exclusions, some policies will not pay out for self inflicted problems e.g.; drug abuse.
- Any medical problems that exist before the policy begins may affect premiums.
- How much and how often will you be expected to pay the premiums.
- How flexible is your policy, can you reduce or increase cover as circumstances warrant it.