What is life insurance?
If you face fatal illness or fall victim to unforeseen events that are liable to cause you financial hardship, life insurance serves to protect you and your dependents from this difficulty. Life insurance comes in the form of a contract which states that you and an insurance company have legally agreed upon the terms of an insurance policy. Based on this agreement, the insurance company will pay your surviving heirs the amount stated in your insurance policy in the event of your death.
Do I need life insurance?
If you are the family breadwinner, it naturally falls to you to provide your family with food, shelter, education, and other comforts. In the event something happens to you, having life insurance on hand will ensure that your family will still be provided for, whether it's to maintain their day-to-day expenses or to furnish them with funds to secure their future.
How much life insurance protection should I get?
As a rule of thumb, it is a good idea to buy life insurance that's worth five to seven times more than what you earn right now. To get a clearer understanding of what you need, it is best to consult you insurance agent for a detailed assessment (financial needs analysis) of how much life insurance is best for you.
Is there a specific type of life insurance for me?
There are many types of life insurance policies available, and the one you end up buying should be equal to the level of your age and financial responsibilities. It will be a good idea to buy several policies comprised of term, or temporary life insurance, and permanent life insurance, such as whole life or universal life.
What about group life insurance, will this good enough for my family?
If you work for a company that employs a large number of people, chances are, your employer or union has you covered by a group life insurance. Group life insurance is a type of term life insurance that protects you until you reach the age of 65, or until you leave the company you're working for. While this type of coverage can protect your family financially should anything happen to you before the age of 65 or during your company tenure, the coverage may not meet your all of your family's needs.
Where can I get a life insurance quote?
You can get a life insurance quote from your life insurance agent. Set an appointment for an assessment your financial requirements, also known as a financial needs analysis. With your agent's assistance, you'll be able to determine what type of life insurance and how much coverage you should get. Based on these needs, your agent can compute a quote of the amount of premiums you need to pay.
What is a beneficiary?
You may come across the term 'beneficiary' when you fill up your life insurance forms. The beneficiary is any person whom you designate to receive a sum of money that the insurance company will pay in the event of your death. You beneficiary can either be your wife or your children, or both your wife and children together. Should you choose, you can buy an additional policy and name a charity of your choice or church of worship as beneficiary. If you decide not to name a beneficiary, any proceeds from the insurance company will be set up in a trust or form part of your estate
What will happen if my beneficiary dies before me, or at the same time I do?
Should your beneficiary die before you do, the life insurance proceeds will go to a contingent beneficiary you may have designated, otherwise, it shall form part of your estate. If you and the beneficiary you named in your policy die at the same time, the insurance company will refer to the law of succession, which states that in case of these kinds of events (such as an accident), the beneficiary is always presumed to have died first.
Can I designate a minor to be my beneficiary?
If you have named one of your children under the age of 18 to be your benficiary, and something happens to you, the insurance company will give the proceeds of your policy to a guardian or trustee that you have designated beforehand. This guardian or trustee will receive the money in behalf of the named minor benficiary. In some cases, if no guardian or trustee has been named, the insurance company will pay this sum of money to the courts, which will then appoint a trustee. When the minor beneficiary comes of age, this trustee will be responsible for turning over the insurance money to the beneficiary.
Can I change my beneficiary?
You can. Set an appointment with your insurance agent, and you will be supplied with the appropriate forms that you will need to fill up to name a different beneficiary.