What Makes an Ideal Life Insurance Policy

"What's the perfect policy for me?" It's a question often asked by people shopping around for a life insurance policy. It's a valid one too. After all, companies offer a myriad of options that it can be quite confusing which one to choose.

But here's the thing: different people have different needs. An unmarried person likely needs a less comprehensive policy, for example, compared to the head of a family of six. That is why in this article, we will talk about in general terms what you need to look into if you want to find the ideal life insurance policy for you. So if you're ready then let's get started with...

  1. It provides you with adequate coverage. Going back to the example we used earlier, your needs would be different if you were single than if you were a head of a family. So an ideal life insurance policy is one that provides you with enough coverage depending on your personal circumstances.

    When deciding on the ideal policy, the general rule of thumb is to take your income, your financial obligations, and a little buffer for your beneficiaries, and multiply the figure by 10. So if you earn $100,000 year, have debts amounting to $5,000, and would like to provide $2,000 annually for your family for vacations, then your ideal coverage should be $1,070,000. This of course primarily applies to term life insurance.
  2. It's the appropriate type of insurance for your needs. There are several types of life insurance designed for the different needs of an individual. If you're a businessperson looking to protect your business in case of an emergency, then a business overheads type of insurance will be more appropriate to you. It can, for example, help provide you with funds in case a part-owner of the company dies and you need to buy his shares.

Meanwhile, if you're a head of a family looking to secure your family's future, then choose a term life insurance policy. It will then provide your family with a lump sum payment when you die. The difference between the two is quite obvious: the first one is designed to help protect the business, while the other protects the future of the family of the insured.

Basically, you need to combine the two to help you decide what the ideal policy is for you. So it helps to know what your personal circumstances are and the type of insurance that's perfectly suited for your purposes.

That is where the professional advisors at Rate Detective can help you. They will look into your personal circumstances and provide you with rate comparisons of Australia's top insurers, so you can see exactly the perfect type of insurance for you.


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Published on June 6-th, 2013 in Life Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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