How To Use Life Insurance To Protect Your Family Finances

How To Use Life Insurance To Protect Your Family Finances

Article by Life Saver

Most of us know just how valuable Life Insurance can be, particularly for protecting your dependents against the financial hardship caused by the unexpected death of the main family breadwinner.

When looking for plans to provide the required cover, most people tend to focus solely on the monthly cost which may not provide a true indication of the best value over the required term.

Are your life insurance premiums guaranteed?

For example term life insurance plans usually offer two types of premium, guaranteed and reviewable. As the name implies guaranteed premiums are just that. The premium is fixed at outset and cannot subsequently be changed by the insurer in the light of poor claims experiences. Reviewable premiums however are subject to a periodic review and therefore the premiums could be increased by the insurer if this class of insurance was subject to more claims than anticipated. Although guaranteed premium plans tend to cost slightly more initially than reviewable plans they are worth considering particularly for terms in excess of 10 years.

Perhaps the best way to obtain maximum value is to select the right type of plan to match the need. For example most people automatically select lump sum cover when setting up a life insurance policy for family protection. This type of plan is fine if you need to provide lump sums to pay off debts