Buying a life insurance policy for your family members is vital. It protects them and ensures that life goes on uninterrupted in the event of death. But purchasing the policy is not a walk in the park. There are many challenges that need to be overcome. In some cases, you may even need the services of a lawyer for a life insurance policy. Here are the 4 things you may need to consider when deciding to buy a life insurance policy for family members.
1. The duration of the coverage
Normally, a life insurance policy may last for a stated period of time or for a lifetime. So it is critical that you make up your mind on the duration of the policy. If it is a lifetime cover, it should take care of things like income replacement as well as burial expenses.
2. The amount of coverage required
It is important that you determine in advance the amount of coverage you want for a member of your family. The coverage should be enough to ensure that they remain financially stable throughout their lives. Also, look at their level of debt, the amount of income that needs to be replaced, mortality expenses and the level of education you want them to attain.
3. Other objectives
Before purchasing a life insurance policy for a member of your family, consider whether the policy will be used for savings. Normally, permanent life insurance policies have cash and face values. The face value refers to the amount of money that the insurance pays out when the insured dies. The cash value grows with time. So, it is necessary that you learn how you may use the cover in your financial portfolio. Also, you may need to check if it is possible to convert the policy into permanent life insurance. If your goal is to have the benefits paid to the beneficiary upon the death of the insured, then a permanent life insurance coverage may be a better option.
4. Physical Examination
Most life insurance policies will require that the insured be examined by a nurse. It is a physical examination that tries to verify the condition of the person to be insured. The information obtained is used to complete a questionnaire on the health status of the member. To find out if this stage is mandatory and whether the family member will accept to be examined. Also, find out if the member wants the data obtained on their physical health to remain confidential or not. The results obtained will be used to compute the cost of the policy.
Although there are other things to consider when purchasing a life insurance policy for members of the family. The duration of the cover, the amount of coverage required are the most critical aspects. Also, consider the objectives of taking the cover and what you must do before signing the contract.