The recent surge of life insurance advertisements has attracted much interest and debate and as with everything in life, if something sounds too good to be true, it usually is.

Everywhere you look, there are offers of affordable and easy life insurance. Simply call this number / click here and you can be approved in minutes. No medicals, minimal paperwork and near instant approval. Anything wrong with this picture? You bet.

While people serious about their life insurance requirements seek qualified advice from Financial Advisers, it is easy to get caught up in the hype of a perceived deal and be caught out. Here’s why it pays to heed instincts when considering life insurance needs:

What is insured?

Life Insurance is a term familiar to many people; however you should be aware – like most things, all things are not equal. There can be large variations in what policies cover. Think about the term “car” – an instantly recognisable word; however, the differences between a Kia and Porsche are many and varied.

What is low cost?

Make sure you compare apples with apples. How can you decipher if a life insurance solution is cheap, if you are analysing completely different policies. You should exercise caution when evaluating premiums as you need to keep in mind that policies offering no medicals generally mean an increased premium cost in lieu of not assessing the health status of those being insured.

Also be wary of weekly or daily figures; this can be used as a distraction from the annual premium.

Is it personal?

A key component integral to life insurance is your age, family make-up including dependants, lifestyle, financial obligations, future aspirations etc – as this provides a snapshot of your situation and hence how much cover is required. We all have different circumstances, so you need to exercise caution when an advertisement offers a flat amount – i.e. $500,000, as this is certainly not based on your own situation.

The true value of advice

We strongly believe in doing things properly and that there is no substitute for professional advice. If you think about what is at stake, it is your family’s financial future and welfare; is that worth risking on a non-personalised life insurance solution?

Opting for a life insurance provider that is generically positioned through the media does not take into account your own circumstances and is potentially asking for trouble. It may mean strict and convoluted definitions (i.e. very specific coverage of events), inadequate levels of cover, broad exclusions and or high costs.

If anyone in your social circle is contemplating life insurance options or would like to review their current cover, it’s wise to speak to a qualified Financial Adviser who will undertake a detailed analysis of your situation and provide advice based on your needs.

Source: Capstone Financial Planning.

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