Apologies for long absence of posts on my blog. I had to go to India to take care of my father, he had hospitalized with critical condition. Now he’s doing good and I am back in states. This is a guest post from Ruby, she talks about benefits of having an insurance coverage and steps to take to get a million dollar coverage.
Insurance cover is the amount of liability or risk that insurance services cover for an entity or individual. An insurer issues it in the event of unwanted or unforeseen occurrences. There are various types of insurance covers like life, auto, and other exotic forms like whole-in-one insurance cover.
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Factors that determine the amount of insurance cover that an entity or individual needs
Multiple factors determine the amount of insurance cover that an entity or individual will have. However, when you break down these factors, the probability of the occurrence of the insured event largely determines the amount of insurance cover that an entity or individual needs.
For example, since most insurers know the probability of young male drivers being involved in accidents to be much higher as compared to say, middle-aged married men that have a wealth of driving experience, they charge them higher premiums.
The benefits of insurance cover
Insurance cover provides you with the dual benefits of security and savings. You should therefore make this investment tool an integral part of the financial plans that you have because it offers the following benefits.
1. Risk cover
Nowadays, life is full of many uncertainties. Hence, insurance cover helps in ensuring that all your loved ones can still enjoy a relatively good quality of life in case of any unforeseen event.
2. Planning for your life stage needs
Insurance cover is not only a long-term investment but it also helps in providing for financial support in case of sudden death. It can help in meeting your goals ranging from your children’s education, the planning of a relaxed retired life, the building of the home that you have always dreamed of to the marriage of your children, according to your risk appetite and life stage.
Life insurance policies, that is, traditional endowment plans have defined maturity benefits and in-built guarantees through various product options like Guaranteed Maturity Values, Guaranteed Cash Values, and Money Back.
3. Protection against the rising health expenses
Life insurers offer you the numerous benefits of protection against chronic diseases as well as hospitalization expenses through stand-alone health insurance coverage or riders. Since medical costs are escalating and the incidence of lifestyle illnesses or diseases is increasing, this benefit has become very important.
4. Building the habit of thrift
Insurance is defined as a long-term contract that requires you as the policyholder to pay fixed amounts at defined periods. This helps in building the habit of making long-term savings. In effect, it enables you to build a decent corpus for meeting your financial needs at different life stages through regular savings that you make over a long period.
5. Profitable and safe long-term investment
Many regulations govern insurance. For example, the regulatory body namely IRDA, ensures that all stakeholders have a primary responsibility for the safety of your money through different regulations and rules. Insurance also ensures that the focus of the insurers is on the returns that they get over a long-term because it is an instrument for long-term savings. In addition, insurance prevents insurers from taking risky investment decisions so that they can get short-term gains.
6. Mortgage redemption
Insurance serves as a very effective tool for covering loans and mortgages that policyholders take so that the bereaved families do not have to bear the repayment burden in case of any unforeseen event takes place.
7. Tax benefits
Insurance plans help in providing attractive tax benefits when you enter and exit most of them.
8. Growth through dividends
Traditional insurance policies offer an opportunity for participating in the economic growth. You do not need to take the investment risk in order to do so. The insurers distribute the investment income among the policyholders by announcing bonuses/dividends every year
9. Income through annuities
Life insurance is among the best instruments for planning for your retirement. You can utilize the money that you save during your earning life span to provide yourself with a source of income when you retire.
How to get an insurance cover of one million Dollars
The decision for an insurance coverage amount is very important because you want this cover to offer you with full life time benefits. Hence, you should keep some points in mind before you take such a cover.
You can get an insurance cover for a million dollars by following a few simple tips.
1. Considering the option of taking permanent life insurance
Term life insurance policy provides you with payment benefits for a certain period while a permanent life insurance cover like a whole life policy has a much larger cash value that will accumulate with time Therefore, if you want to get the benefit of one million dollars, you only pay fewer premiums if the cover that you have is term life.
2. Consulting from insurance agents
Most insurance agents with a wealth of experience in the insurance industry know everything about insurance. You should therefore consult from some of the best insurance agents on the options that you have in order to get the most attractive policy. If you get such a policy, you are bound to incur some costs that you should consider as you decide on the policy that you should take. The agents can also be of great assistance when you are filling the application forms that are necessary for such a large policy.
3. Undergoing medical examinations
Examinations are not necessary for cheap insurance policies. However, for such a big insurance policy like one million dollars whose benefit amounts are high, it is mandatory for you to undergo a medical exam and the company’s physician will do the procedure instead of your physician. Fortunately, you do not incur medical expenses when this kind of medical examination happens.
4. Reading through the paperwork
You should carefully read the policy contract before signing it so that you can be sure that the insurance company has indicated all the necessary details and that you do not have any problem with paying this policy. Your insurance agent will help in guiding you on how you should proceed if there are any areas that you do not understand.
5. Paying your premiums
Fortunately, you can pay per month or per year for a one million- dollar life insurance. If diseases that are caused by your bad habits like smoking or ignorance are putting your health at risk, the medical exam will surely record it. Hence, the company may require you to pay higher premiums.
Ruby Andrew’s author bio
Ruby Andrew lives in Bristol, UK and is an avid reader and blogger. Since her early years she’s had a passion for writing. Her articles have been published in leading UK newspapers. Her areas of interest are food, reviews (Book/Movie), Travel, Fashion, Lifestyle, Fitness and Health. She works as a guest blogger on her chosen areas of interest and currently writes on behalf of EHIC card.
Kevin H @ Growing Family Benefits says
In the U.S. agents have to tread very carefully when talking about life insurance as an investment. The primary need has to revolve around life insurance. The policies have distribution and death benefit charges that greatly diminish returns relative to other investment choices.
If presented as an investment, the agent could lose his license. It is policed closely.
I was wondering about your absense, good all is well with your father.
yes he’s well and good now. He had cardiac arrest.
Kate @ Money Propeller says
When my father decided to get a health insurance, he had undergone to medical examination because he applied in a big insurance company. But unfortunately, after 2 months my father passed away and didn’t get any money from the company.