How do I compare life insurance policies?
Learning how to compare life insurance policies is something you want to get right the first time around, as it can save you thousands of dollars over the life of a policy.
However if you already have a policy and believe that your premiums are too costly or perhaps does not offer the range of coverage you are after, then perhaps it's time to review your situation and compare life insurance policies.
If you have an existing policy, one important point to make is that you should not cancel your current policy until you have your new policy in place. The last thing you would want to happen is an accident to occur while you are left unprotected whilst thinking about alternative policies.
Another problem is that a new company may not be willing to offer you cover, or may offer you unfavourable terms. So it is therefore very important not to cancel your existing life insurance policy.
Review your life insurance policy
Have you changed jobs, or perhaps have more dependants like children or elderly parents? Or have you purchased a new home, leaving you with a substantial mortgage? Thinking about your situation well before you decide to compare policies will give you a good idea on how much cover you may need.
Some other things you may like to factor in when conducting a life insurance review include credit card debts, personal loans, and educational costs for your children if you were not there to support them financially. Ideally you will want enough funds until your children turn 18, and also enough to pay off the mortgage on your home. You will also need to factor in an amount that will allow your partner to cope from the initial shock of losing a loved one and subsequently becoming the main breadwinner.
Compare life insurance policies
If you decide to compare policies yourself, ensure you compare 'apples versus apples'. This means that you should compare a policy with the same sum insured and similar policy offerings. However if you plan to compare different premium types, then advice from an expert should be sought. It can get quite complex trying to compare different premium types (blended, stepped or level) so you may find that speaking to a financial adviser very beneficial.
Apart from comparing premiums, you should consider other policy options like:
- Built in benefits such as funeral expense benefits
- Terminal illness benefits
- Any exclusions or situations where a payment may not be paid
- Built in childrens insurance and amounts
- Optional benefits (at additional cost) that suit your situation such as TPD Insurance or trauma insurance
Compare life insurance quotes today
If you already have a policy in place, and have compared a number of alternative policies, making the change can be easy. Simply fill in an application form for the new policy and lodge it for assessment.
Most people use an adviser which generally makes the process a lot easier. If you would like your policy in place quickly and efficiently, then using the services of an adviser to get your life insurance quotes is the key.
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December 2010
