The benefit of a life insurance policy and the financial peace of mind it provides cannot be overstated. Among the advantages of having life insurance include. A financial preparedness in emergencies, a means of income after retirement and support for loved ones after death.
If you’ve never bought life insurance, getting one can be confusing. Purchasing life insurance is different from the many other kinds of coverage that there is.
In this article, the steps to follow on how to buy life insurance is explained.
7 ways to buy Life Insurance in Nigeria
Step 1: Determine your need for Life Insurance
First, you’ve to consider the reason why you need life insurance. The purpose of life insurance is to financially support a person’s loved one (spouse, children or parents) after death. Life insurance is also useful to cover for debts, mortgages and can serve as a retirement plan.
Step 2: Pick a type of Life Insurance.
There are two types of insurance policies: term and permanent life insurance. Under permanent life insurance lies two kinds: Whole and universal. Term life insurance is less expensive compared to permanent life insurance. Your life insurance needs will determine which type best suits you.
Term Life Insurance: Term life insurance is low cost and the most common life insurance option for most people. It provides coverage within a specific term, usually 10 – 30 years. It is used to give financial support to beneficiaries. If the insured passes away during the term, identified beneficiaries will inherit the sum assured from your insurer. The benefits of term life insurance end once the time is over.
Whole Life Insurance: This is a permanent life insurance that entails consistent life insurance premiums with accumulating cash value over time. Some whole life policies require premiums from the insured till death and some for a certain number of years.
Universal Life Insurance: This is the second kind of permanent life coverage. Universal life insurance comes with accumulated cash value and other investment options. This is a suitable plan for those with financial investment interests.
Step 3: Find and Compare Different Life Insurance Offers
After examining the kind of insurance that you think will suit your needs, you need to find a suitable insurer and compare. No two companies are the same. There’ll always be a difference in benefits, rates or policy. Seek out insurers with flexible coverage and personalised plans. You should also analyse the financial strength of the company, the claims process and customer service. Ensure that their service is top-notch and favourable.
Step 4: Compare Life Insurance Quotes
Request for life insurance quotes from the selected companies you intend to purchase from. Asking for quotes from your insurance agent will help determine the number of premiums you’ll be paying on your policy. This will help you select the best deal. Most companies have a quote generator on their website that’ll allow you to get their quotes. Also, this can be given by their agents.
To get a quote, you must provide some personal information.
Step 5: Fill out an Application.
After choosing the most suitable coverage from your list, you must fill out an application. Necessary personal information will be required, such as your age, job, gender etc., as well as a driver’s license or national identification number. Your medical history will also be inquired for verification, so you may need to submit a doctor’s report. It is useful in determining the kind of rates you’ll be getting.
Step 6: Prepare for the Insurer’s Medical Exam
Life insurance companies usually require applicants to get a physical and medical exam before they can be approved for coverage.
Step 7: Wait for Approval
After your application goes through and the medical examination is concluded. The underwriter of an insurance company determines if you’re eligible for coverage. They also determine what your coverage is. This can take a few days, depending on the insurance company.
If you’re eligible, your policy documents will be sent to you to append your signature. You’ll also determine how your premiums are paid.
Most life insurance applications can be made online through most company’s website. It’s a quick process. Remember, no one policy is best for everyone. You’ve to carry out more research to find out which options best meets your needs.