By financen | August 3, 2011 - 6:29 pm - Posted in Insurance

A solid life insurance policy will give you peace of mind and valuable security for your loved ones’ futures. But if you don’t choose wisely you could end up with the wrong policy – or a useless one – leaving your family’s financial security in jeopardy. Here are some of the most important pitfalls to avoid in picking your life assurance policy.

*Cheap Start Policies*

If you’re looking online and comparing a life quote or two, you might find that a lot of the cheapest policies on offer are actually ‘low-start’ policies. These policies start at a low price, but the premiums increase monthly throughout the term. They may start out cheap, but work out how much they’ll cost over the years, you may be better off with a more expensive fixed premium.

*‘Reviewable’ Policies*

Check if low-priced deals are ‘reviewable’ policies. These policies tend to stay at a low price for the first few years, but are then reviewed and re-priced. Insurance prices tend to rise, particularly as you get older, so the premiums may get much more expensive later down the line.

*Joint Life Policies*

Some insurers offer deals for insuring yourself and your partner under one joint policy. Most joint policies pay out either on the first or second person’s death, but two single life policies will both pay out separately to the beneficiaries, and will likely not cost any more than a joint policy. Single life policies also often give you more flexibility with distributing your estate in accordance with your will, whereas joint policies usually pay out to your surviving spouse.

*Failing To Disclose*

You have to be honest with your disclosure form otherwise it may completely invalidate your cover. If you have a pre-existing health condition it may be a little harder to find, but you can still get life insurance. If you have a particular condition, some associated charities and organisations may offer advice on insurers.

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