Choosing life insurance for your life partner has significant importance as it is a crucial step for safeguarding your family’s future. Your life partner plays an integral role in your life. Therefore, it is your utmost responsibility to secure his or her financial security and stability in the unfortunate event of your absence.
By securing your partner’s future, you are also maintaining the well-being of your family. However, purchasing the best life insurance policy for your beloved can be a tiring task. There are various factors that you must consider when taking this crucial step.
For your well-informed decision-making, we have shared some most fitting tips so you can choose the best life insurance policy for your beloved partner.
Tips to Keep in Mind While Choosing Life Insurance For Your Life Partner
- Consider your financial situation
All life insurance policies have a fixed monthly premium, which you must pay monthly or annually. The premium fee therefore also comes under your regular expenses. So it is worth calculating the amount that you can comfortably pay every month or a year without disturbing the other family expenses.
Remember, you should never calculate the amount on the spur of the moment. Take time to think everything through and review your monthly family budget. Then determine how much you can allocate for paying the premium. Write the following on a piece of paper (or in an Excel spreadsheet):
- What exactly is the family’s total monthly income?
- How much of this do we spend on rent, utilities, and bulk purchases?
- Do we have credit if so, how much is the installment?
- Do we have other insurance? How much do we pay for this per month?
- Do we have any regular savings?
- Do we have any other recurring expenses? (e.g. Course, gym pass, school canteen, library membership fee, etc.)
In addition to all of this, you should indicate the average amount of money spent on non-regular expenses (for example, clothing, entertainment, repairing a car or household appliance). Do not forget the amount intended to increase the “emergency reserve” either.
Based on all of this, you will see approximately how much you can spend on life insurance each month. During the calculation, the goal should be that the fee does not cause an interruption in the payment of your everyday expenses, but still provides a sufficiently high level of coverage. At this point, the question may arise as to how big the sums should be in general terms. How much does life insurance cost these days?
It is impossible to give an exact answer to this since insurance companies carry out individual pricing, so no two monthly premiums are the same. Nevertheless, there are quite cheap products for which you have to do market research. Contrary to misconceptions, the difference is not only due to the difference between the insurance coverage that you include in the contract and the amounts paid, but many other aspects also play a role.
- Consider insurance amount and duration
Life can suddenly take an unexpected turn: an unexpected death or an accident with a permanent disability may happen to you or anyone in the family.
If you are the sole breadwinner of the family, then your partner may struggle in the future to keep up with the family expenses. Therefore, when considering how much insurance you are going to take out and for how long, you need to know what amount is sufficient for your family to be out of trouble.
It is important not only to pay off your existing loans but also to think about the amounts needed for everyday living: bills, food, children’s schooling costs, and occasional or permanent expenses. The insurance amount must cover them for several years. The goal is for your life partner to be able to maintain their current lifestyle even if your income were to completely disappear.
Regarding the duration, it is worth thinking about a period of at least 10 years, and if there are children in the family until they reach at least 18-20 years of age. It is advisable to think through every item that you can consider as an expense.
For example, children’s education, support intended for the start of life, the increase of savings, the financing of the works necessary to preserve the condition of your property, and so on. Also, involve your life partner in the math so that you can decide on these important issues together.
- Choose the type of life insurance you want for your life partner
Knowing about the premium and the insuring amount is the first step towards selecting the best life insurance for your life partner. But you also have to decide what type of life insurance you need for your partner. Life insurance can be grouped in several ways but basically, we are going to discuss about three basic types: Term life insurance, whole life insurance, and universal life insurance.
Term life insurance is for a certain period determined at the time of signing the insurance policy. It can be 10, 15, or even 30 years. The insurance company may not cancel the contract before this period. So you know exactly how long you can enjoy the protection.
In the case of whole life insurance, however, there is no expiration date. The insurance does not expire even after the date, but can even remain in effect for life. However, this method is typically not used for risk but for savings life insurance, where risk protection plays a secondary role.
Universal life insurance is a mix of both term insurance and whole life insurance. With this insurance, you can enjoy the benefits of both types of insurance with affordable premiums and healthy compensation.
To choose which type of life insurance you want for your life partner, it is best to consult an expert or reputed and reliable insurance company.
- Find out what affects the amount of life insurance
If you are searching for any online calculators to find out what would be your monthly premiums for your partner’s life insurance. Give it up because you can rarely find such a calculator online. Plus, you cannot rely on their answers even if you find one.
Insurance companies use individual pricing, so the company will reveal the exact amount after the preliminary assessment. However, it is worth being aware of the factors that will definitely affect the price of your partner’s future insurance:
- Age: The insurance amount is usually lower for younger persons. There is a logical reason for this: for a young, healthy person, the chance of losing their life during the duration is much lower. But for an older, sick person, this is a much more realistic risk.
- Health status: The reasoning is similar to the previous point. Insuring a healthy person will be cheaper because there is less chance that he or she will die during the term. Chronic diseases (e.g. cardiovascular diseases, high blood pressure) all increase the risk, so the insurance premium will also increase.
- Occupation and hobby activities: The premium amount you need to pay is also influenced by what your partner’s occupation is and what kind of leisure activity he or she does. The lesser the professional risk, the lesser the premium.
- Additional risk factors: These include harmful addictions such as smoking or regular alcohol consumption. Although many people try to hide these, the insurance company can look up your partner’s medical findings and medical histories, so the ugliness can quickly be revealed.
- Take out a customized policy
As you can see from the above, there is no single best life insurance, but everyone should find a product that is closest to their goals and ideas. In fact, many times it still happens that we do not come across a plan that meets all our ideas.
In such cases, combining several life insurance policies can also be a solution. If, for example, death insurance premiums are cheaper with one insurer and disability insurance with another, then we can do much better with two separate contracts in terms of services and finances.
However, combining several types of insurance is definitely an expert job. It is worth using the help of an independent broker, as a professional has a good understanding of the market. He can easily adjust between the offers of different insurance companies. During the consultation, you can outline your needs, and based on this, he selects the most suitable products for your partner.
- Compare policies of different insurance companies
After you choose the type of life insurance policy you wish to purchase for your life partner, the next step is to check the offers of various insurance companies. For this, use credible sources as much as possible. You can find detailed descriptions of the insurance and the contract conditions on the websites of the financial institutions.
The website of the Nepal Insurance Authority is also a useful source of information with its comparisons of life insurance types. You can always check the company’s financial statement, how much they fulfilled the claims, how much claim amount is pending, how they are doing on quarterly profit and loss, what is their capital amount, their assets, and so on.
- You can take out a couple life insurance policy
Some insurance companies also offer to take out a single policy with two people insured in the same policy. Such as National Life Insurance Company offers couple life insurance in which both husband and wife are protected under a single policy. On the death of one insured spouse, the company will pay the living insured spouse the death benefit.
Including both husband and wife in the same policy will definitely help lower the premium fee and the company will offer multiple discounts as well. However, you should keep in mind that the need for coverage may differ from husband and wife.
The husband may have one need while the wife has another. It is also possible to take out an individual policy, adding some extra guarantees that also cover another person.
- Read thoroughly the terms and conditions of the policy
Before signing the policy, it is worth considering whether all the required information and clauses are included in the policy are not. Also, you must be familiar with all the terms and conditions mentioned in the policy. Such as excluded events, including coverage, claim process, beneficiary name, canceling process, and so on. Certain details of the contract may also contain new information, which you must familiar be with and consider as to whether they can be accepted. Personal consultations can help a lot in orientation.
- Do a Periodic review of the policy
In addition to regular premium payments for the already concluded contract, you must also ensure that the given insurance keeps up with its goals. You must review the policy once a year to see if any changes are necessary. Reasons for this may be, for example, if the family is expanding or your partner has taken out a loan.
- Be familiar with the claiming process
Purchasing life insurance and paying premiums is the mandatory process, as is knowing about the claiming process. After the maturity of the policy or in the event of the death of your partner, you need to collect the insurance compensation if you are the beneficiary. So knowing the process is vital which is:
- Request the death certificate from the corresponding authority.
- Keep your citizenship and insurance policy original copy handy.
- Complete the application to receive benefits.
- Select the payment option.
- Within a period of up to 30 business days, after you have submitted all the documentation to the insurer, you will receive payment for the policy according to the modality you have chosen.
Life insurance for your partner secures the financial status of your surviving partner in the absence of others. It allows your surviving partner to start over his or her life or take care of children and family. It allows them to support them financially. We hope these tips will help you choose the best life insurance for your partner. Always be safe and be smart!