via LOOP Jamaica
As you settle into adulthood, you may start to take on the bold steps of starting a family, building a career and figuring out your financial goals.
Somewhere along the way, the topic of life insurance may come up and you will be faced with that very important decision of getting a life insurance policy.
The very thought may be daunting to you as deciding on a life insurance policy may not be the easiest choice to make and you will have questions for sure – why do I need it, how does it work, what is the best option for me and many more. But not to worry; your financial advisor will guide you and help you choose the life insurance policy that is right for you based on a number of factors.
But what exactly is a life insurance policy? In the strictest sense, this is a contract between you and your life insurance company, where you agree to pay for the policy on a regular basis, in the form of what is called a premium, and your insurer agrees to pay out a sum of money to your beneficiaries at a specified period of time, such as in the event of your passing.
There are also other types of life insurance policies, which include living benefits, such as a critical illness plan as well as insurance products with an investment component.
Recently, Sagicor Group Jamaica Chairman, Peter Melhado added another life insurance product to his portfolio, highlighting that no matter the stage of life you are at, life insurance is always a critical part of planning for your future. He shared that it is important to assess your insurance portfolio and fill any gaps, ensuring there is adequate coverage and protection for yourself and your family.
Melhado noted that as a family-oriented person he has always recognised the value of life insurance and sees it as an important part of helping to create generational wealth for his family and children. “Nothing in life is certain but having life insurance with a strong and reputable company as Sagicor means you have one less thing to thing to worry about when it comes to providing for your family,” he said.
Karen-Ann Phillips, one of the leading Sagicor financial advisors, who wrote the policy for Melhado, shared the below key considerations for when taking out a new life insurance policy;
The stage of life you are at; are you married? do you have children? do you own a home? or plan to buy one soon. Regardless of where you are in life, it is important to start putting in place a plan while you are still healthy, that will offer long-term protection for your loved ones, your inheritance, your assets and even your future self. The best time to do it is always now.
Do your research and compare various policies; this will help you decide the type of life insurance policy that best suits your goals and your budget, keeping in mind that your age, gender, medical history, family health history and other risk factors will become relevant to the type of policy available to you.
Know the purpose of why you are purchasing the life insurance policy - is it for investments/savings; final expenses to cover funeral costs etc.; retirement income or in case of an unexpected critical illness.
Decide how much coverage you need - How much of the family income do you provide? Does anyone else depend on you financially? How will your family pay final expenses and repay debts after your passing? Based on the answers to these questions, decide how much coverage you need, for how long and what you can afford to pay.
Choosing your beneficiary (s) – this is critical information for you to consider carefully as in the event of your death; the sum insured will be paid out to your beneficiary (s). This information should also be reviewed periodically if you have existing policies; for example – adding a spouse if you get married; your children or your parents.