Life insurance is a significant investment. What you achieve is that you secure the financial well-being of your dependents after your death by paying regular premiums at intervals during your course of life. Making the wrong investment choice could be meaningless and could end up being a liability.

Before you jump to a conclusion, read the following advices.

Tip 1: Decide on the right broker

Insurance matter is a specialised subject. A good, experienced broker could be worth his or her weight in gold. They normally have agency agreements with all the large insurance companies, so you will gain access to many different products through a single access. Also, brokers tend to be cautious about the direction they provide, because they can be booked under South African Law if they aren't.

If you have any doubts, you can check their qualifications because highly regarded brokers are normally attached with numerous insurance institutes in our country.

Tip 2: Select the perfect life insurance plan

Not all policies are fruitful for everyone. If you need life cover until your death, you may want to plump for whole life coverage instead of term life insurance. If you want to add a savings portion together with some other benefits above your life cover, a universal life type of product could turn out to be the better selection for you.

Spending some time with your broker discussing about exactly what desire and checking out the various options open to you will be useful.

Tip 3: Get the right amount of Insurance cover

The right amount of cover is decided upon by the amount of income you want your survivors to take delivery of after your death, the cost of winding up your estate, your assets and liabilities, and the value of other life insurance that you may already have in place. Buying too much cover will result in you paying more than is necessary and buying too less could result in your family facing adversity after your death.

Your broker can plan out to help you ascertain exactly how much additional cover is required to meet your current requirements.

Tip 4: Affordability is priority

The premium you pay depends on the amount of cover you select and several risk factors such as age at the time of insurance, health and medical history (including family history), tobacco use, etc. If the premium is further than your resources, consider dropping some of the benefits you may have added to the policy, such as trauma or dread disease, before cutting back on the amount of cover you have selected.

It is very important that you are comfortable with the premium. If not, the policy will finally lapse, leaving your family in the lurch.

Tip 5: Check out all options that are offered

Not all companies are equally cost effective on all policy types. Some companies specialise in term life policies, others in whole life policies; while others still have the ability to offer universal policies at a more competitive rate than the rest.

A broker will obtain quotes from the various insurers and help you to compare these on a feature-by-feature basis. Brokers also normally know which insurance companies? finances are sound and which are particularly efficient when it comes to resolving claims. When you buy insurance, the day you need the protection may be decades away, and you'll want the company to be around to write the cheque when you need it.

Tip 6: Benefits are worth more than the separate policies

If you are thinking about getting insurance for dread disease, functional impairment, etc., you could save money by adding these benefits to the life insurance policy you are about to buy as an alternative of buying separate policies for each type of cover.

Tip 7: Choose added riders

A rider affords you the opportunity to periodically increase your life cover by as much as 20% without having to prove your health. If you don't select a rider, you will need to go through a medical examination and blood tests each time you want to increase your insured amount. If your health happened to have deteriorated since your previous medical examination, you could end up paying a higher rate for the cover than would have been the case had you opted for a rider.

Get to know details of your investment

Once you have purchased your life insurance policy, do remember to re-examine and understand its provisions. South African law gives you a 30-day cooling-off period. Within this period, you have the right to reject the policy without incurring any price at all.