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Unsure how to buy a life insurance policy? Read on

There comes a time in everyone's life when they finally decide that they really need to look towards the future, as well as the well-being of their family, and give serious consideration to taking out a life insurance policy. This can be a particularly confusing purchase, so we hope to be able to demystify it for you.

The first thing you need to do is fully understand what exactly is meant by the term life insurance policy. In a nutshell, life insurance will help your family to pay off significant debts, such as bank loans and mortgages, as well as protect them with an assured income should you die.

It may seem a little bit morbid, but it's something that you really should at least familiarise yourself with at some point. To make things a little more confusing, there are a number of different kinds of life insurance policy that you can take out, each with different benefits.

The most common form of life insurance is known as term assurance. This is also the easiest to understand, given that you select a term for the policy to cover, and then should you die during the term, the policy will pay out to your beneficiaries, however if you don't die, no money will be paid out and you will not be refunded the money you had paid into it.

The alternative is a whole of life policy. This type of policy will cover you right up until you die, with a guaranteed pay out on your death. However, as you might expect, these policies are significantly more expensive.

Before jumping the gun, there are some things that everyone should be aware of when it comes to taking out a life insurance policy. The first thing to be mindful of are policies that start out costing very little, but increase with time as you get older. Ultimately, these policies can turn out to be an awful lot more expensive than regular flat rate policies. This also goes for policies that are stated to be 'reviewable' life insurance policies.

Finally, it is absolutely essential that you withhold no information about your health when applying for life insurance. Insurance companies will usually do everything they can to avoid paying out, so if you leave some vital information off your health history, it could well void your policy on death, leaving your family with no payout.

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