Choosing the right insurance

HAVING life insurance is an important financial safeguard for our family and loved ones if the unexpected occurs.

While discussing life insurance can be a sensitive topic, without some planning for the unexpected it could be incredibly difficult for many families to maintain their current standard of living.

The idea of life insurance is to provide financial security for your dependants if you die.

Generally, the policy will be expected to clear the mortgage and significant debts and provide a nest egg for the family.

Purchasing life insurance involves making decisions such as choosing which cover level is suited to your needs and which benefits you should consider.

The options and range of policies available can sometimes seem complex.

So what are the ways to select and purchase a life insurance policy that is suitable to your circumstances?

Online and over the phone does offer convenience, often with minimal or no medical information required, and the approval process can be immediate.

When comparing insurance policies online, it is important to do the research and ensure you understand exactly what is included and excluded in each policy.

Direct life insurance may be quick to arrange but you may be less able to select and tailor a life policy that suits your needs.

Also, if you do decide to purchase life insurance direct be careful to understand any policy exclusions before you sign up.

Some direct life insurance policies reduce the amount of cover as you age while others exclude from cover any pre-existing conditions at the time of applying.

It's very important to read the 'fine print' with any insurance policy, but it's especially important with a direct product, if you don't have a professional there to assist with your decision.

An important benefit of using someone such as a financial adviser is they do the research for you and choose suitable cover for your situation and to help you to receive a payout should you need it.

Most importantly, if something happens, the financial adviser will be there to provide valuable assistance through this difficult period by assisting you to receive the insurance payment in a timely manner.

Rick Rutten is an authorised representative of RI Advice Group P/L. This editorial is general advice only.

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