When to buy the right life insurance ?
The most important decision in life insurance is to buy the right type for your needs. Broadly speaking, at the younger ages when family responsibilities are heavy (from marriage through to when children become independent) protection is more important, whereas in the later stages of working life investment becomes crucial.
It’s been said at the start that there are often hundreds of policies of one type available. Life insurance companies change their premium rates for particular policies from time to time in response to market conditions or internal considerations. Furthermore, it is impossible to cover all the minor variations in policy conditions that may, for one individual, be extremely important. And though it is only current rates of premium per sum assured (together with any specific differences in conditions of the contract) which determine the relative value for money of protective life insurance, this is not true of investment oriented policies. The best value here will not be found by comparing premium rates because the ultimate maturity value delivered to the policyholder will depend mainly on investment experience, the result of the investment decisions of the life company over a period of many years, and this is not easy to predict.
As regards caring life insurance, it is in any case more important to choose the right type of policy than the cheapest individual policy obtainable, since the difference in actual cost will not be very large. In choosing an investment oriented contract it is more important to pick up the right one for the individual, but in general this is beyond the ability of the individual and requires the assistance of an insurance broker or other adviser. It is possible, given the necessary background knowledge, for the individual to decide such matters himself, but there are good arguments against doing so.
The advice available to individuals on life insurance can be of variable quality. In some cases it is less professional and objective than it ought to be, largely for historical reasons concerning the structure and development of the life insurance business.
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