But sadly, many of them are wrong and it is their family that pays the price for that mistake. This article offers some sound advice for acquiring a suitable life insurance policy. Knowing your family is cared for will allow you to rest easy.
Although term life insurance may seem like an affordable and easy way out, it is also very temporary. Term insurance is attractive because of the lower cost, which is why many people buy it. However, you should be aware that term policies can double as a financial asset that can be borrowed and repaid against. Actually, term policies are valid only during the time that you are making your payments.
Take the time to shop about and compare prices and policies before you purchase. Believe it or not, some premium costs vary as much as 50% depending on which company you decide to go with. This is why it’s very important to comparison shop. You should only compare quotes that take in consideration your previous medical history.
You may find that life insurance premiums will be higher if your hobbies are high risk activities such as skydiving or drag car racing. Also, certain occupations, such as a racer or a helicopter pilot, could be considered by the insurance provider to be very high risk. Thus, your premiums will be higher.
Buy your life insurance through your financial advisor, rather than using a broker. Insurance brokers earn commissions from the sales of life insurance policies. Most financial advisers are compensated with a flat fee. Due to this fact, you will find that advisers are going to be less likely to force a sale, and will be more likely to help you find the best policy available for you.
Fully disclose any high risk activities you participate in. While it could cost more money for you, it will keep you from making yourself ineligible when an insurance companies find out for themselves. Withholding this information could be considered as fraud, thus, carrying big penalties.
If there are people in your life who rely on you financially, it is important for you to consider buying a life insurance plan. In the event of your death, your life insurance policy will enable your family to carry on and pay the mortgage, or enable your children to attend college.
One way to keep down the cost of insurance is to avoid going through a middle man and paying a commission. These fees are added to your premiums and go directly to your broker and insurance agent. “No load” policies may save you cash if you can locate a company willing to sell you a policy directly.
Advice from financial advisers and brokers should be taken with a grain of salt, especially if the individual stands to benefit from your willingness to sign up. For example, agents should not claim to have more knowledge than ratings agencies do about insurance companies. Neither should an agent dismiss ratings as unimportant, or claim that ratings are not available. If any of these things happen, make a complaint with the company’s customer service department.
Whenever possible, pay your premiums annually as opposed to monthly. By choosing to pay the premium annually, you can save a bit of money.
Do your own research and talk to a professional about life insurance. Professionals can help answer your questions and clarify your options. You may have a better idea of what coverage to purchase after talking to a professional.
It is always a smart idea to look at a few comparable policies and prices when you are looking to purchase life insurance. Life insurance policies take many forms, and a renewable policy from one company may be active for a longer period of time. In another case, if several policies offer the coverage you have decided on, one may be preferable because of cost. It’s crucial that you do your research before committing to a policy.
How do I determine the amount of life insurance to buy? The first thing to consider is if you actually need life insurance. Are you single and without any children? If so, you probably don’t need life insurance. When settling on the appropriate amount of coverage, a good figure is between 5 to 10 times your before tax annual salary.
When shopping for a life insurance policy, make sure you choose a financially solid institution from which to buy. You can still save money, while staying safe. Make sure the company has been given an A rating, or higher from an independent agency known for its research on the topic.
Keep your insurance documents in a safe location. Let the beneficiaries know where the policy is so they can go through it and send a claim if they need to.
The most important thing you can do is purchase your life insurance policy from a well-known company with an established reputation. All companies that sell insurance are not equal and will never be equal. Do your homework and research companies that are established in the insurance business, have a good financial standing, and are known for their quality investments.
Clearly, it’s a good idea to pre-plan when purchasing insurance, even in situations in which it seems unnecessary. By reading this article and applying its advice, you could prevent your family from suffering possible hardships.