What You Should Know About Life Insurance
[social_share]Life insurance is a must for anyone who is serious about providing for family or loved ones after their own death. Failure to purchase an adequate life insurance policy can put an individual’s family in economic hardship and leave them without any kind of safety net for the future. But before a policy is purchased, there are a number of things that consumers should know about life insurance.
Men pay higher premiums than women
Generally speaking, men engage in riskier lifestyle choices when compared to women. This can include careers, hobbies and recreational activities. In addition to riskier behaviour, men also tend to die at a younger age than women when it comes to nearly every major disease and cause of death. Anything from heart disease, liver disease, cancer, stroke, diabetes and beyond overwhelmingly affects men at a younger age and in greater numbers. When all of these dangers are factored in, men simply pose a greater risk to the insurance companies than women do. When it comes to taking out a life insurance policy, therefore, men should always expect to pay higher premiums.
Overweight people pay higher premiums
It is easier to understand why morbidly obese individuals would cost more to insure than thinner people or people who are in good health. They stand a better chance of dying sooner than the rest of the population and this early death is a risk to the insurance company’s coverage and can lose them money. To offset this risk, the insurance company will raise the premiums for those individuals who are significantly overweight. Even putting on an additional 50-100 pounds (while not morbidly obese by professional standards) can result in as much as a 50% increase in premiums for the policy holder. Likewise, losing the excess weight and falling into the appropriate weight class can encourage insurance companies to reduce the policy holder’s premiums since their risk of early death from the complications of obesity have been reduced.
Employer-issued life insurance often is not enough
Life insurance that is offered through an individual’s place of employment can be a great asset in the policy holder’s financial portfolio. In the event of death, the employee has at least one solid form of coverage to assist them and their families. Often, however, employer-issued life insurance is not enough to cover all of the policy holder’s needs in the event of their death. This is because employers cannot afford to provide the most comprehensive coverage for their personnel without putting themselves at greater financial risk. For instance, an employee’s beneficiaries may only receive a maximum of $25,000 death benefit on the employer-issued life insurance. While this may cover some of the cost of the funeral and burial expenses, it will not be able to address many concerns beyond that. For this reason, employees are urged to consider purchasing life insurance independent of their employer in order to supplement their employer-issued plans. Continuing with the above example, the employee could take out a $100,000 plan with an outside company, resting assured that their beneficiaries will receive enough money from their combined coverage to pay for all outstanding expenses.
