Life insurance is easily misunderstood yet; it is such an important part of personal finance. Not a few would rather avoid talking about having a life insurance especially since it brings up the topic of their own death. However, if you have the right information, it is something that your household would benefit from.

In this article, we would go over the top 8 things you should know about life insurance

  1. If people depend on you, you need life insurance

From spouses to dependent children, people who depend on you financially should not have to suffer financially if you were suddenly to be no more. The death of a loved one can cause a lot of expenses to be incurred. These expenses were unforeseen and money may not have been left out to take care of them. Also, after spending so much on the death of a loved one, they need to carry on with their lives, and they can hardly do this if nothing has been specially left for them. However, if you are much older and you do not have a spouse, children or siblings who depend on you, then you would not need life insurance.

  1. Life insurance is not just about the money

A lot of people assume that life insurance is simply about the monetary value attached to a person’s life. It is much more than that. It is compensation for a person’s inevitable demise. Many times, life insurance has helped people lessen the burden and financial costs that may have been left behind by the person who died. Also, as we know that death is no respecter of persons, life insurance also helps you put your mind to rest because then, you know that you have made plans in case of unforeseen circumstances.

  1. Life insurance is not an investment

As with any other type of insurance, life insurance is not an investment. Rather, it is a risk management tool. It is important to note this because a number of people make wrong decisions off the notion that life insurance is an investment. Life insurance can be very expensive and is hardly for you if you do not have a steady paycheck and/or live from hand to mouth. Life insurance should be taken when you have enough to provide for you and your family, save away and still have excess. On no account should life insurance replace your savings.

  1. Life insurance comes in two main types

There are two main types of life insurance: Term and permanent. The Term Life insurance is usually the least expensive and mostly patronized. Here, the insurance company bases the insurance on the probability that you, the insured, will die within a stated time/term. This term is usually 10, 20 or 30 years. Also, this means that you may pay your premiums for this stated term, and get nothing out of it eventually because you did not die, which we suppose is a good thing, except if you think otherwise. The permanent life insurance allows the life insurance policy to exist permanently or for a person’s whole life.

  1. The life insurance is a policy

A policy is a contract between a life insurance company (insurer) and someone who is financially interested in the livelihood of another called the policy holder. So, the insurance pools the premium of policy holders and this is what is used to pay out claims. So involved in this contract is usually the insurer, the insured, the owner and the beneficiary. The insurer is the insurance company contracted in making the life insurance and paying out claims in case of death. The insured is the person upon whom the life insurance policy is based. The beneficiary is the person who is to receive the claim upon death of the individual insured. The owner is the person responsible for paying out the premiums. Usually, the insured and the owner are the same person.

  1. Premiums paid on life insurance

Premiums paid on life insurance is dependent on the risk of the insured dying. We mentioned above that life insurance can be pretty expensive. However, it can also be inexpensive. For example, a healthy person without any risky behaviours may pay a low amount of money and receive benefits in millions of naira. A person with so many risky behaviours like smoking will pay double the premium to receive the same benefit. A person with known health problems will pay even triple.

  1. Cancelling an existing life insurance policy

When cancelling a life insurance policy, it is important that you do not leave money or coverage on the table. For instance, if a particular policy isn’t appropriate for you anymore, it would be best to not cancel the policy until you have a new one with a more appropriate coverage. Also, if you do not wish to have a policy anymore, you simply stop paying premiums and inform the insurance company appropriately. Then, you will not have any more coverage. You can also cash in on a permanent life insurance policy if you feel you do not need it again.

  1. How to calculate the best life insurance policy for you

Online tools exist which can help you calculate the ideal policy for you. You can also contract an insurance agent who can help you through the process. Most of the time, premiums given by insurance companies are the same whether application was made online or with an agent. A dedicated insurance company can also help you save money by choosing the best policy for your situation. Also, the insurance company would want to know how much of a risk you are, and may also evaluate your current health, past health and the health of your family. It is important to answer truthfully. This is how they would be able to evaluate how much premium the owner is to pay on the life insurance.

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webmaster
January 28th, 2020
Posted In: Uncategorized

To many people, buying life insurance is something you do when you are older. But that is a myth and could not be farther from the truth! Regardless of your position in life, nobody knows what the future holds. Everyday, people pass away and the devastating consequences which this leaves on the family is enough strain to add the worry of the survival of those left behind.

The case is made truer if the person who dies is the breadwinner, and has dependents in the form of children, spouse or siblings. Here are reasons why you need a life insurance policy.

  1. Look after those left behind

A life insurance policy helps you to secure the future of those who would be left behind after your demise. Nobody prays to die, but with that occurrence, you do not want to let them down totally. From replacing lost income to payment of the children’s education, taking out a life insurance ensures that everyone gets the much-needed security to pull through the loss.

You do not want your children having to get student loans or dropping out of school entirely because you did not factor in the eventuality of death.

  1. Handling debt left by you

Nobody should have to deal with debt left behind by a family member because of their death. Many times, they are not even prepared to handle such financial burdens. This debt can range from personal loans to credit card loans. A life insurance policy helps them to take care of such debts after you are gone.

  1. Achievement of long term goals achievement

A life insurance policy can help you achieve long term goals in the event of a cash-in. Also, due to the fact that the life insurance can come with multiple investment options, it helps you grow your cash without paying any mind to it. However before engaging in life insurance policies that involve investments, be sure to read through the terms and conditions in order to have a full grasp of the risks and rewards. You do not want to be caught unawares by policy changes. A life insurance also supplements your retirement goals. A life insurance can serve as some sort of pension plan, whereby you enjoy a steady flow of income even after retirement.

  1. Life insurance is cheaper to buy when you are younger

Now, we are not saying that every millennial should get a life insurance. You do not need it if you are still living off your parents. However, if you are a working millennial and you have dependents, you need to buy a life insurance policy. Coverage costs are much lower when you are younger. However, beware because insurance agents may want to cash in on your youth and naiveté to sell you an insurance policy which you do not exactly need.

Due diligence needs to be done, before you accept an insurance plan.

  1. You may not qualify for insurance when you are older:

A person’s “insurability” is important in determining whether or not they qualify for a life insurance package. To determine the premium to be paid on a life insurance, the insurance company conducts a series of health checks on your personal health and your family’s health. At a young age, your “insurability” is at its highest because you are most likely do not have any health challenges. However, as your grow older, the chances that you will qualify for a life insurance reduces because health problems may set in. When you are in good form, you get to pay very little as premium, compared to someone who has risky health behaviours or health challenges.

Life insurance as all insurances are based on uncertainties. You may be well now and feel that taking a life insurance is not necessary. But do you know that once you fall ill, you may not be allowed to take an insurance policy? It is like buying a car insurance, the insurance company would only hand out insurance policies on new cars and not worn out rickety cars!

  1. Business needs:

Though this is not common, many people take life insurance because of their businesses. This also helps if you are the provide most of the funds in the business. For the period after your demise, the business would be able to make use of the proceeds received from your insurance policy to keep running while looking for alternative sources of income

It is also very important that when taking life insurance in business, both partners do so to avoid trust issues which may arise.

Call us today on 01-9054380

webmaster
January 28th, 2020
Posted In: Uncategorized

People often wonder what the best time to buy a life insurance plan is and end up putting it off but life insurance is a necessity to anyone. Think of life insurance as a safety net. As you go about your daily activities in life, you do not hope to use the net, but it is great to know that the net is there. If something happens to you, won’t you want the availability of a financial cushion for everyone you care about?

One of the major reasons people buy life insurance is to create financial security for the future of their family. A lot of people say they do not buy life insurance because they did not think they needed it. We are here to tell you that you definitely need a life insurance plan; whether it is to provide for your final expenses or to provide money for your family after you are gone, you definitely need life insurance.

Let’s talk about the best time to get Life insurance.

Age

Faced with other necessities like feeding, debt, car payments, etc, people tend to put off buying life insurance. A lot of young people put off buying life insurance and because of that, a greater percentage of people currently buying life insurance are from the older generations. In truth, buying life insurance at a young age is way cheaper than putting it off. While it seems like a good idea to take care of basic necessities like feeding and day-to-day activities, missing out on buying life insurance while you are still young actually has significant economic impact. It is very similar to delaying savings for your retirement. The faster you purchase it, the better so if you buy life insurance while you are in your thirties you can end up saving thousands of naira.

Health

Another important factor when it comes to getting life insurance is your health. Not only is it cheaper to buy when you were younger, buying life insurance when you are healthy actually helps you save costs. When applying for life insurance, you get evaluated for medical conditions like diabetes, cancer, heart disease, high blood pressure, etc. If you have a medical condition that is extremely serious or you are diagnosed with terminal illness, there is a probability that you will not get insurance coverage at all. You can easily avoid all these problems by getting your life insurance in place before any of these happens.

When you reach a milestone

There are some significant milestones in life like promotion at work, getting married, having kids or even buying a new home. When these changes take place, it’s the perfect time to get life insurance to cover your new needs. This helps you to be more proactive as you are able to anticipate any life changes and save money by getting your insurance early.

Life Insurance while working

While some companies give their employees life insurance, it is still a great idea to buy your own life insurance policy. The reason for this is that it’s a bad idea to rely on the life insurance given to you by your employer because you can lose that job, or decide you want to work somewhere else and lose your insurance policy. Remember, the older you get the more expensive your life insurance becomes so you are better off getting your personal backup insurance policy to ensure that you always have life insurance even if you lose your job.

Is there any reason to wait?

While it is easy to keep putting off getting a life insurance plan, the truth is, doing it actually brings peace of mind. If you know you are prone to forgetting it on your to-do list for months on end, you should consider getting it done today. Just check it off your to-do list, and enjoy the peace of mind that follows when you have the knowledge that you have it in place. It’s great to buy a life insurance policy even when you are young, healthy, and have no responsibilities. FBNInsurance offers some of the best life insurance policies across Africa –  FlexiEu and Guaranteed Lifetime Retriement Income Plan. These plans are quite flexible and provide for all your specific needs.

Call us today on 01-9054380

webmaster
January 28th, 2020
Posted In: Uncategorized

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