Life insurance is one product that so many people pay so much for and know so little about. Taking the time to do your homework and learn how to insure your life can save you lots of money. It will also give you peace of mind knowing you’ve protected your loved ones in the best possible way.
Here are some suggestions on how to insure your life and get the best deal on your life insurance policies:
• Always take the time to shop and get at least two (and preferably three) quotes for each category of life insurance – term, whole life, variable life, universal life, etc. People generally spend more time shopping for a camera or a new coat than they do for life insurance – one of life’s essential (and costly) needs.
• Stay away from life insurance policies that state: “You cannot be turned down” or “No medical examination required.” It is reasonable to assume that people who cannot otherwise get coverage will apply for and get this insurance, making this group a much higher risk than a well-screened one.
The company has to charge higher rates in order to compensate for the additional risk. If you are in good health and think you can pass a physical, you would be better off with a plan that screens policy-holders more carefully.
• Don’t assume all group policies are cheaper. Many advertised “group specials” such as Fifty-five Plus or Veterans Life Insurance may be very expensive for the benefits received. Look for traps such as no coverage during the first two years or prices quoted per $100 instead of per $1,000 of protection. Nevertheless, there are some group policies that provide substantial savings.
• Evaluate the competence and attitude of the life insurance sales representative. These agents can design an appropriate program if they know their products are willing to put in the time. Some try to find the right kind of coverage at the lowest cost, but others are content to sell any policy – needed or not.
• Use objective third-party life insurance comparisons. It may be difficult to compare the relative merits of two different policies on your own, because there are so many different options and features. The best way to compare policies is to get an independent evaluation.
• Look beneath the surface. Don’t forget to evaluate the various features of the insurance, such as increases in cash value and face value of the policy over time. Some policies increase in value and benefits while others remain the same. Still others, such as mortgage insurance, may even decline.
• Ask for quotes per $1,000 of insurance. This will make life insurance comparisons easier. Keep in mind that some companies charge lower fees for large policies – $50,000 and more. The higher the coverage, the lower the cost can be per $1,000 of insurance.