Many people view life insurance policies as a sort of gamble. As strange as it may sound, this is what certain people believe. There are some risks worth taking, but this isn’t one of them, because in a worst case scenario, your loved ones will be suffering for your decisions. Take the following advice to find the right insurance policy for you.
Hobbies and professions which are thought to be hazardous to your health can raise the life insurance cost. If you feel your life insurance rates are too expensive, think about quitting bungee jumping, scuba diving, or skydiving. Also, vacationing in dangerous locations around the world may cause you to be disqualified from getting discounts.
Fully disclose any high risk activities you participate in. You may have to pay more for coverage, but if you are injured on the job or while engaging in your hobby, you want to be sure of being covered. Withholding this information could be considered as fraud, thus, carrying big penalties.
When shopping around for an insurance company from which to buy life insurance, choose a large company that has a solid reputation. An inexpensive policy is worthless if the company cannot provide payment when necessary.
Inform your family and loved ones about the life insurance policy you choose and what it entails. Give your beneficiary the details about the policy, such as the amount, a copy of the documentation, and details about who to contact if a claim needs to be made.
Look for the lowest possible commission when you buy a life insurance policy. 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 the best route to take in order to purchase a life insurance policy. You can either do this by yourself or get it through your employer. You can also get insight from a fee-only financial planner, purchase a policy through a financial planner who works by commission only, or even purchase it via an insurance agent.
Unless you truly do not have another choice, stay away from “guaranteed issue” insurance plans. This type of insurance policy is meant for people whose health involves pre-existing conditions. You won’t have to have an exam, but the premiums will be much higher and the coverage will only be available in limited amounts.
Earlier this article compared life insurance to a bet. However, when the risk is your family’s financial security, it is not a game that you should play.