It is no surprise that nearly everyone needs a life cover policy. Regardless of whether you purchase a term policy or a whole life insurance policy, you will have the peace of mind knowing that those who depend on you financially will not suffer further stress when you pass away. I have shared with you below three common questions that answer a few basics of life cover:
What happens in the event that you need to change a beneficiary?
When you purchase insurance, you will have to designate a beneficiary. This should be a person of sound mind and ideally a person who can take care of the finances that he/she will be given. There is no restriction on who you can appoint as a beneficiary. Whether you want a close relative or a friend as a beneficiary, it is entirely up to you. In some cases, circumstances such as death, divorce or children may deem it necessary to change the beneficiaries in a policy. You will have to contact your insurance company and request for the changes in writing. The request for the removal or addition of any person in the beneficiaries’ list must be accompanied by your official endorsement.
How will your beneficiaries get compensation on your life policy?
When you pass away, the insurance company may carry out it its own investigations to certify the cause of death. Some insurance companies may not compensate your family in such cases when individuals willingly commit suicide. When you purchase life insurance, it is important to talk to the beneficiary about the decision. While talking about death is not an easy subject, making the beneficiary aware of the financial resources you are saving for them will provide you peace of mind. Ideally, give the beneficiaries the contacts of the insurance company or person who is in charge of handling compensation in the company.
Should you buy life insurance on your mortgage or a life insurance policy?
You first must know the difference between buying the two. When you buy life cover on a mortgage for instance, the amount that you can purchase will depend on the amount of your mortgage’s principal. It is important to understand that over time, as your mortgage steadily decreases, so will your life cover. On the other hand, the amount you buy on a life insurance policy will be set – this means the amount purchased will not decrease over time.