What are the exclusions?
8. Don’t fall for all the bells and whistles the insurance company may try to sell to you.
I hope these eleven steps will help in your insurance planning. Whole life policies are usually more profitable to the insurance companies than term insurance policies, so be prepared to hear a sales representative promote whole life as the best possible choice.
Remember, buy what you need and make adjustments as changes become necessary. If you need more insurance in the future, term policies are usually renewable and convertible – these allow you to renew your policy or convert your policy to a whole life at a pre-determined price regardless of your health condition. Find out if they are compensated through commission, fee-plus-commission, or fee only. If you are not satisfied with it during that time, cancel the policy and you will get your premium back.
11. Speak with an independent broker.
Independent brokers will have access to many more products than just one firm can provide. Understand your needs.
No one understands your financial situation better than you and nobody really cares as much about your financial situation than you. Term insurance provides protection only, without a savings component. A term insurance policy should be able to cover most of your debt and financial needs. Remember, you may not need an expensive policy – you need the policy that’s right for you and your family’s financial situation.
2. Because it is based on protecting your family, it should be based on your needs.
Purchasing life insurance can be a little tricky. Although not all insurance sales agents will try to use scare tactics to get you to buy the expensive products, here are a few steps you can take to ensure you get the right product for the right price. However, just because your advisor is commission-based doesn’t mean they are bad – just ask more question.
6. Knowing exactly how much life insurance you need is not always an easy task; you can get a rough estimate of your insurance needs by adding together your debt, estimated funeral costs, and six months to a year of income replacement. Taking stock of your financial policy can allow you to select the right policy for your needs. Do your homework.
Make sure you do your homework before purchasing an insurance product. So just say, “No, thank you” and keep researching.
5. Don’t sign until you understand the contract.
10. How long are premiums guaranteed for? Ignore the “what if” scenario you might hear from an insurance sales representative. Ask it now at Moolanomy Answers!
Copyright © 2007 - 2009 Pinyo B. Ask the tough questions.
Don’t be afraid to ask the advisor questions. Take a 30-day free look.
You have 30 days to look at the policy and understand it. If your broker makes a recommendation in the first meeting, you know that they have not really analyzed your situation and looked for best options. Whole life and universal life policies have a savings component and are much more expensive. When I worked as an independent broker, I was able to offer much more to my clients than just a company product. Compare similar products.
When you price shop, make sure you compare similar products.
9. Remember insurance is an important part of financial planning.
Photo by Leonid Mamchenkov via Flickr
1. Is the policy renewable and non-cancelable? Avoid one-meeting recommendations.
Determining the exact needs of a family and finding the best product takes time, even for seasoned advisors. You should know the product inside out before buying it. You are not allowed to reproduce the content within this feed in any manner.
Please visit Moolanomy Personal Finance Blog, Moolanomy Finance Directory, and Moolanomy Answers for more great content.
Do not make your insurance planning complicated. There are certain situations where a whole life policy may be more advantageous than term, however, do not purchase it simply because your sales representative told you should.
3. Insurance sales agents have a bad reputation for trying to get clients to purchase expensive products so that they can enjoy a larger commission check. Understand term insurance versus permanent insurance.
There are several types of insurance products available, understanding the difference between term and permanent life insurance (such as whole life) can help you make an informed decision about your insurance needs. With commissions, the advisor may have a conflict of interest. This feed is provided for the convenience of Moolanomy’s subscribers. You are almost always better off just paying for term insurance, and using the cost savings to invest elsewhere.
7. Is there an accidental death rider? Understand how the advisor gets paid.
Although insurance brokers are commonly paid commission on the premiums they sell, not all brokers apply this model. If the broker receives any commission from the sale, make sure to look at all alternative products available. The basic idea is to educate yourself by doing your homework so that you can understand what you are buying.
Relevant Articles You May LikeLife Insurance and Medical Information Bureau (MIB) (24)10 Things To Know When Buying Insurance Policies (8)Better Health and Finances With 100 Push Ups (35)Making Progress Toward Buying Our Life Insurance (11)Insurance Coverage and Opportunity Cost (19)Touching Peoples’ Lives (13)Don’t Buy Credit Card Life and Disability Insurance (4)
Do you have a financial question? The advisor is obligated to explain it to you. Recognize that insurance is for protection – not investing.
Sometimes an insurance broker will provide illustrations of how you can use your insurance policy for investment purposes; insurance is to protect you not to help you grow wealth. Make sure it fits your needs and budget, and make sure you understand the contract. They should be able to find you the best product for the best price.
4.
Posted under Credit Repair
This post was written by admin on October 5, 2009
