Whether you are a first time life insurance purchaser, a life insurance policy holder wanting to combine some of your insurance policies, or a current life insurance policy holder searching for a better rate and increased coverage, you are bound to have some questions. The following article can provide you with valuable hints and tips to help you understand the complexities of life insurance, and to make informed decisions when it comes to choosing a policy.
Your life insurance policy need not be for an incredibly large sum. This can empty your wallet while you are still alive. You want to purchase a policy that not only secures your loved ones for years to come if anything were to happen, but that is also a reasonable price as well.
If your job is high risk, or if you have any hobbies that would be thought of as high risk, you need to disclose them to the life insurance company. It’ll cost you more, but it can prevent ineligibility if your insurance company found out themselves. Withholding this information could be considered as fraud, thus, carrying big penalties.
Don’t pay higher commissions when buying life insurance. The commission is what the insurance broker/agent gets paid. This cost is usually included in the premium price and can drive your price up significantly. Policies such as “no load” policies might save you money, because they are bought directly from the insurance company, so the commission to an agent is eliminated.
Decide what type of policy is best for you and your family, and how to go about purchasing it. If you can’t go through your employer for insurance, you can always purchase it for yourself. You can also seek advice from a financial planner who works on a fee-only basis, buy a policy from a financial planner working on commission, or buy it from an insurance agent.
Pay your premiums in one lump sum as opposed to being billed monthly. By selecting the option to annually pay the premium, this helps to save you some money.
Stay away from “guaranteed issue” life insurance policies unless there really is no better choice. Guaranteed life policies are targeted towards individuals with some sort of pre-existing health condition. Coverage under this type of policy is limited to smaller dollar amounts. However, you are not obligated to have a physical exam to determine eligibility.
Thoroughly inspect your insurance policy’s cancellation procedures to be sure that they meet your expectations before you purchase. If something happens and you need a different policy or no longer want to do business with the company, knowing about their cancellation policies will be helpful. However, many companies make customers who cancel their policies pay a hefty penalty fee. You want to know exactly what is going to happen when you change up a policy, what fees or anything else might apply, so you aren’t shocked.
Researching life insurance on your own is a good idea, but talking to a professional is even better. 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.
Do not buy a policy without doing some research first. Make sure that your budget and needs are met. You should read the policy carefully and know its legal implications.
You should rarely ever cash out your policy. Many people cash out policies if they don’t have money to pay bills or have a financial emergency. This creates a ‘vacuum’, sucking down all of the valuable money and more valuable time that you’ve pushed into creating this policy. There are other ways to do this.
When purchasing life insurance, watch out for those agents who seem a little too eager to sell and who seem to be the know-it-all types. People like this are usually unreliable and they only want your money.
Avoiding caffeine prior to your scheduled life insurance medical exam is always a good idea. Caffeine has the pharmacological effects of making you feel a bit jittery, raise your heart rate and elevate your blood pressure–all things which do not bode well for your exam.
Now that you have read this article, you should be more confident in your ability to select a policy that fulfills the needs of yourself and your loved ones. You should now understand how life insurance can provide for your family in the event of your death, as well as how to find the best policy rates and comprehend coverage types and terms.