Buying life insurance isn’t the same as buying car insurance. It is a lifetime commitment that requires research, and possibly a few questions for your broker to put you at ease.

  1. Will your premiums change? Your financial needs are going to change throughout your life. You might have kids entering and finishing school, or you might pay off your bond or increase it for upgrades. Ask your broker for a product where the premiums will cover the specific durations of your needs, such as the number of years you’re still going to have to provide financially for your children’s education.
  2. Should you take monthly or lump-sum payouts? There are products on the market where you have a choice at the time of claim between monthly or lump-sum payouts in the event of a serious illness or disability. It is hard to predict what will suit your needs the best at claim stage – ask your broker for a product that provides this optionality.
  3. Will your life cover be reduced should you claim? Some insurers will automatically reduce your life cover in the event of a claim for a critical illness. Ask your broker for cover from an insurer that does not do this, as your financial responsibilities will remain the same if you recover from the illness.
  4. Will your premiums increase in the next five to 10 years? What are the best and worst case scenarios? Will it change according to your activity levels and general health? There are products on the market that seem very affordable in the beginning, but the premiums increase drastically over time with their policyholders inevitably cancelling or reducing their cover to save money. Ask your broker for more sustainable cover and projected premiums that will match your needs precisely over the years.
  5. What are you covered for? All life insurers have lists of clinical conditions that they provide cover for. Some of these lists are very limited with less than 150 conditions, and others are more comprehensive, with market leaders covering more than 300 conditions. Ask your broker to find you a product that provides cover for as many conditions as possible.

Source: HK Strategies. Images: Pixabay

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