Have someone ever come to you and asked whether he or she would like to insure your life through life insurance.
While this insurance provides financial protection for your family in the event of your death, most insurers ignore this fact since no one wants to speak about death in their life.
However, this insurance ensures your beneficiaries receive a specified amount of money to use as their expenditure.
A life insurance is an agreement between you and an insurance company that states that in the event of your demise your beneficiaries will receive a lump-sum payment as a result of the total monthly, quarterly or semi-annually premiums you have being paying.
The party being insured is supposed to fully disclose their past or present medical conditions and any high-risk activity that they may be engaged in so that the insurer makes an informed decision whether or not to insure them.This is just like health insurance.
The average middle class worker needs a good insurance policy to protect his family from enduring suffering in the event of his death but most people do not have it due to the perceived high cost by the general public.
A survey done by the Insurance Barometer showed that most people responded by stating that a healthy individual in his early 30’s would require to pay $500 a year just to get $250,000 cover, when in reality its actually $160 per year.
The insurance company does not control what your beneficiaries will do with the money, they can decide to use it to pay their utility bills, the house mortgage or tuition fees.
Types of Life insurance.
There are two main types of life insurance which are term life and permanent life insurance.
Term life insurance.
With term life the coverage is taken for a particular period of time while the payment of the premium remain similar throughout the entirety of the policy. This is much more popular because it of its lower cost and thus easy to sell.
Clients are usually given a policy duration at intervals of 5 years from 10 years such as 10 or 15 or 20 and so on. At the time of your unfortunate demise, as long as it is within the term of your insurance policy, your family will receive the death benefit, without taxation, after making their claim.
Permanent Life Insurance
This lasts for the duration of your life and therefore it is more expensive than term life insurance. Varieties of a permanent life insurance include:
Whole life insurance which gradually earns cash value over time which can be used to take a loan or cash that may be used to pay the insurance premiums.
Universal life insurance which offers the option of a growing cash value plus an investment plan of either an index portfolio with a fixed rate of return or an account of your own choosing for you to manage freely.
Burial insurance which has a death benefit amount plus coverage of the burial expenses.
Factors affecting your Life insurance policy
Age matters because the younger you are the lower your chances of dying thus young people will pay lower than old people.
Family medical history- certain genetically inherited illness in your family tree will increase the risk factor thus increase the cost of insuring you.
Sex: it is generally believed that women have a longer life expectancy than men and women rarely commit suicides.
Lifestyle: A person who loves dangerous activities such as scuba diving and reckless drunk driving incidents will pay more because of their high risk lifestyle.
Smoking: People who smoke are at risk of contracting several health problems due to the damage to the lungs.
But is it true this insurance is important, first let’s answer the question below;
When do I need life insurance?
- When expecting a new baby
- When you buy a new home
- When you just married
- When you develop a chronic disease
- When you start earning extra money
- If you have people who depends on your income
How to sell my life insurance.
Are you willing to sell your insurance? Do you know where to start from?
Here are 4 tips to sell your insurance;
- Understand the process of selling this cover and explain the entire process to the client. This means you will have to explain how life insurance works along with its benefits to the client.
- You can hire an independent policy adviser. This individual will assess your policy and offer an appraisal of what this insurance means to the client. The advisor can offer new ideas to add or remove from your policy.
- Find a recommended broker and discuss with them about their charges, license status, commission structure, available discounts and transaction costs.
- Consider several offers from different brokers and determine which one suit you as a seller.