Buy life cover when you are young
Pure life cover or term assurance policies are fairly simple things. You pay a set amount each month for a set amount of cover over a set amount of years. At the end, the policy and premiums stop, simple. Term assurance policies provide only pure life cover so there is no investment element or policy cash value.
The one aspect of life cover that does change is the cost. Life assurance companies regularly review how much they charge according to their own mortality statistics, profit margins and market share. All life cover costs rise as we get older, unfortunately we are more likely to die as each year passes. You also have the added risk of illnesses. If you were to suffer a serious illness then it could be nearly impossible to buy life cover, or the premiums would be so high as to make it unaffordable. No one knows what’s lurking around the corner.
However, with a term assurance plan with guaranteed premiums, once you have taken out the plan then the premiums are guaranteed and fixed for the life of the policy.
So it does pay to take out a policy sooner rather than later as each year the cost of buying a term assurance plan will rise. However, it is important to buy death cover for the right reasons, what’s the use of paying for something that you don’t really need?
• If you have a mortgage then generally you will want this to be repaid on death
• If you have a family and dependents then you may wish to provide additional funds for them
• If you have a business you may want to cover any business loans or Keypersons
Term assurance policies come in a few different styles such as Level Term Assurance, Mortgage Protection, Renewable Term, and Convertible Term. You also have extra options such as waiver of premium and critical illness cover.
To make sure you get the right life cover for you it would be best to seek advice from an Independent Financial Adviser or IFA. These advisers have the knowledge and experience to set up a policy that is suited for your needs and budget.
