LIFE IS NOT SIMPLE - NEITHER IS LIFE INSURANCE
So if anyone tells you that life insurance is easy, simple, no problem - slap 'em, shoot 'em - whatever, but make sure you dispense with their services. Because Life Insurance is a maze of complexity - it isn't simple and it takes time and effort for anyone to work their way through the definitions, words, jargon, and all the other confusing paraphernalia associated with the subject.
What I'd like to do is to explain things in a series of articles to anyone who is interested, or who wants to break through the bovine scatology and general claptrap involved.
So if you fit either of those categories - read on; if not, your on the wrong page!
Let's be honest, the basic premise of life insurance doesn't hold much appeal for the individual who is insured. You pay money - sometimes lots of it over a long time - and somebody else gets the benefit of it? Yeah, right!
Doesn't seem like much of a deal does it?
Of course, if the someone who reaps the reward is someone you care for - well, I guess that's different.
And if he/she happens to be bringing up the kids - well, I guess that's different again.
Or if you've got a business partner who you've worked with for ages, you wouldn't want to saddle him with any business debt if you turned your toes up - and neither should he/she. So I guess that counts as well.
If you happen to be one of those finance, accounting, or economic geniuses who plans everything ahead of time, you'd be a starter, cos you know buying this stuff will never be cheaper than it is for you today. General rule - the older you get, the more it costs. So I guess some forward strategic financial planning is in order, if that's your bag.
But how much to buy, how much to pay, and where to get it?
And here's where it gets complicated.
There's a bunch of online sites trying to sell you all kinds of stuff. Now, don't get me wrong - if they're in the "you die, we pay" space, by all means have a look. But be careful, as some of these products only pay on accidental death in the early years, (car crash, or some other gig) so don't get sick and die in those first few years.
On the other hand, you get what you pay for with Life Insurance and if the price is right AND you fully understand just when and how a payout is made - fill your boots.
But like I say, be careful - don't think you can walk into a Skoda showroom and buy a Mercedes Benz. The basic laws of economics dictate that you can't pay less than what something is truly worth, and all life insurance contracts are not the same.
But if you do opt for something cheaper, it's best to add back a little to cover your risk, just in case what you bought doesn't do what you expected.
When you do that you'll find you're paying pretty much the same as the better priced version.
Finding out all about the stuff online and then talking with an adviser makes good sense. Saves a lot of time and hassle if you've got the general idea beforehand. But just like life insurance - all advisers are not the same.
But that's another subject, I'll deal with next time.