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How To Choose The Best Life Insurance


Most people select life insurance policies depending on the amount of premium they have to pay and while this seems like the right thing to do, it is important to note that other factors should also be considered while choosing the best life cover plan.

The first factor that should be considered while opting for insurance is the face value of the policy. The face value of the plan should be at least 10 times of the policy holder’s annual income. Good policies cover up to $1.5 million however some companies that charge a higher premium may offer additional coverage as well. Although the insured amount directly affects the premium that has to be paid, by selecting a higher insured amount, the buyer can protect his family in case anything happens to him.

Another factor to consider while opting for life insurance plans is the type of premiums offered. Insurance companies offer both stepped premiums and leveled premiums to new policy holders. Stepped premiums allow policy holders to enjoy lower premium eventually but as the policy holder’s age increases, the premiums increase as well. In the case of leveled premiums, the policy holder has to pay a fixed amount every month or year to the insurance company and after the age of 65 years, the policy holder may have to pay stepped premiums.

A few insurance companies in Australia also offer blended insurance premiums that combine the benefits of both stepped and levelled premiums. Buyers are usually advised to opt for stepped premiums if they opt for a short term policy for 10 years or lesser, where as buyers are encouraged to opt for leveled premiums if they opt for long term policies that have a tenure of 15 years or more.

The tenure of the contract is yet another factor that should be taken into consideration while deciding which policy to opt for. Term life covers gives people the freedom of choosing either short term policies or long term policies depending on their personal and financial requirements. term policies can protect people up to they are 99 years old provided that the policy holder pays premiums on time since failure to pay premiums will result in the policy being canceled. Buyers are always encouraged to get quotes from a few insurance companies before making a final decision since this will help them understand which policy is best for them.

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