?While we all know the topic of life insurance isn?t something we necessarily like to dwell on, it is something you should be thinking about if you are a parent. One of the top priorities of being a parent is to be a protector, but if you?re not there to protect your kids ? who will be?
Choosing life insurance doesn?t need to be a big deal, but it is important to get it right. Here are the top tips to remember if you are a mom, and you are looking for life insurance.
Don?t Under-insure Yourself
One of the biggest mistakes a family can make is to under-insure a non-working parent, or a parent who works part time. When the main breadwinner takes out a life insurance policy, what often happens is they will undervalue the work done by their partner.
While part-time or non-working parents may not bring in an actual paycheck, they are technically providing a service to the family. A service that would be paid, if an outside party were to do it.
This means cooking, cleaning, laundry, ironing, gardening, driving, shopping, childcare, and so on. Everything that your family may take for granted, could be something that needs to be considered when buying life insurance.
Also, be sure to complete any questions that relate to you on the application. No matter how well your partner knows you, there is the possibility that they could put down incorrect information. This could void the policy, and stop you from making a claim.
Work Out How Much Cover You Need
There are various ways to work out how much life insurance you will need. Some say you should multiply your income by ten. Others say you should use online calculators. Some say you should only go by the advice of a professional.
Work out what works best for you. Think about any unpaid debts you have, such as personal loans, home loans, car loans, student loans, credit cards and so on. Think about whether you want to put aside a college fund for your kids. Think about any dependants you may have, and their needs, such as nursing care for an elderly relative, or school fees for your kids. Then work out how much your family would need to survive comfortably.
Don?t Assume Your Employer Gives You Enough Cover
If you have life insurance cover at work, you need to make sure it gives you sufficient cover. Many of these work-related policies only cover you for a small amount, and would not go far in supporting your family if something were to happen to you.
Find out how much cover you have. If it?s not enough, you may need to think about getting further life insurance from another provider.
Don?t Buy More Than You Need
If you don?t know how much cover you need, it can be easy to get caught up and buy too much. There is no point being over-insured. It doesn?t offer you any more benefits, it just means you are paying too much. And when you have kids, money can be tight enough at the best of times. Only buy life insurance that is suitable for you, and don?t be persuaded into buying products that you don?t need.
Choose the Right Insurance Provider
While this may seem like a daunting task, you have one trick up your sleeve ? the internet! Going online means you can use comparison sites to check out hundreds of different policies, you can read through the terms and conditions of each policy in your own time, and you can find out what other people think of the insurer and the product.
Read reviews, do some research, and you should be able to find an insurer that is perfect for what you need. Just remember, try to choose an insurer that has an ?A? rating or above to get the best insurance and service.
Speak to a Professional
Professional financial advice does not need to be expensive. When you are looking for an adviser, check out their background, and make sure they offer independent advice. If they work on commission, they will be more likely to push certain insurers and policies, whether they are right for you or not. One place to start is at the AAMI site: www.aami.com.au
Review Your Policy
Once you have chosen your life insurance policy, it does not mean you can forget about it. Think about how much your life changes over the years. This means you need to make sure your policy keeps up! Try to check your policy every year or so, and if anything needs updating, get on it sooner rather than later.?
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Source: http://www.motherhoodsupport.com/2012/08/7-tips-for-moms-choosing-life-insurance/
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