Tips to buy a Life Insurance Policy. What is the average price of life insurance ?

Sep 24, 2008

  1. bhartiaxa
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    bhartiaxa New Member

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    Buying a life insurance cover is quite a simple process. Yet there are some simple tips you need to understand in order to get the best life insurance cover that meets all your requirements. Read on to make your buying of a life insurance a success.

    1) Decide the amount you need to be covered for: This is the most important step in buying a life insurance cover. Find out what is the amount of cover right for you. If your cover is insufficient to meet your present liabilities, your dependents will have a hard time to make their ends meet in case of your death. If you take very high life cover, you will end up paying very high premiums which are a waste of money. So it is advisable to contact an independent life insurance broker who will help you choose the proper cover for you.

    2) Find out the coverage included in your policy: Certain life insurance policies also provide cover for certain instances like unemployment, disability or critical illness. So if you already have separate insurance policies to cover these instances, you can always exclude them as going for them will increase your premium amount. This can be unnecessary expense.

    3)Decide on the type of insurance policy you want to go for. If you want the cheapest insurance policy without an element of investment, go for term plan. For insurance and investment for a definite period, choose between endowment, whole life and unit link insurance policies. Due to the absence of investment option, term policy is the cheapest and unit link policy is the costliest.

    4)Decide how long you want the policy to cover you: Your premium will be decided by the term you want your policy should last. This is very important because as you grow older, your premiums will increase. So if you have decided to take a policy for 15 years, your premium will increase at the time of renewal, as you have grown older. If you want to avoid this situation, opt for a whole life policy so that you are covered till you die.

    5)Get life insurance quotes: Getting life insurance quotes is very important as different insurers have different premiums for a specific amount insured for a certain period with certain exclusions for a certain age. If you choose to avail of the insurance riders than the life insurance quotes will increase and this increase will not be uniform amongst various insurers. Asking for life insurance quotes can save you a lot of money over the policy term.


    6)Study various life insurance quotes: After getting various life insurance quotes, go though them minutely. Understand what every policy covers as well as its exclusions. Select few policies that fulfill your need.


    7)Find out about the quality of customer service of the short listed insurance companies: Quality of the customer service provided by insurance companies will vary a lot. Just because an insurance company is well known, it does not mean its customer service is excellent. You can get a honest feedback about the service of the insurers on different consumer forums, as well as consumer review websites. Here you’ll get an honest appraisal about the customer service of the insurers from actual experiences. It is very important to observe how quickly the company settles the claims, how the company deals with you in case of loss of policy documents and the ultimate surrender value of the policy, in case you cannot keep on paying the premium.

    Following the above points will give you a better base as far as understanding Life Insurance is concerned. This will further enable you to make an insurance policy that will cater to your needs in a complete manner.
     
  2. Newby
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    Duh!!!???:SLEEP:
     
    Newby, Sep 24, 2008
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  3. Mac1958
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    Mac1958 Guru

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    With respect, if a life insurance agent explained the process to me like it's explained here, I would find a new agent.

    The job of a good agent is to walk the prospect through this process based on careful fact-finding and appropriate decision-making, not to expect the prospect to do it themselves without knowing the "ins and outs" of the different variables involved. That's why (good) agents exist.
     
    Mac1958, Sep 24, 2008
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  4. Hadley
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    Hadley New Member

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    What about the financial strength rating from AM Best for the insurance company?

    Considering the current situation of AIG, I would think more and more prospective clients will be inquiring about the financial status of their life insurance company.
     
    Hadley, Sep 24, 2008
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  5. Newby
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    What was AIG rated?
     
    Newby, Sep 24, 2008
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  6. GreenSky
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    GreenSky Guru

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    Did something happen with AIG?

    Rick
     
    GreenSky, Sep 24, 2008
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  7. The Rabbi
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    According to some of the responses on the thread, I can see how hard it is to get a good agent.

    I still wonder how some people think their way is the only way. Too bad you learned nothing from the efforts of the poster.

    If you would have said something constructive, it would have been good.
     
  8. Newby
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    This thread was started by a spammer. If I'm wrong, I apologize.

    If AIG had a bad AM Best rating last month, I was not aware of it. I would like to know more if AM Best had forewarned us because I missed it. I have not done business with AIG so I was not aware of how they were rated.
     
    Newby, Sep 24, 2008
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  9. xrac
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    xrac Guru

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    Newby,

    I am with you. :yes:I don't think this original post contained much of value as far as buying insurance is concerned.
     
    xrac, Sep 24, 2008
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  10. djs
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    djs Super Moderator Moderator

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    Okay, the problem with the original post (which is actually well thought out) is that the average consumer wouldn't have a good basis of comparison when looking at the answers to these questions.

    Exclusions to a life policy? Hmmm, you still have a heartbeat, we won't pay. After that, it begins to get a bit murky.... acts of war, suicide in the contestibility period, etc, but they all read about the same.

    The questions left out are more telling, such as does the agent have the knowledge to figure out who should own the policy (and why), is a trust involved, what are the potential estate tax implications, etc?

    Even AIG still has their reserves to pay their death claims. I wouldn't panic (yet). Except New York, I don't think any state insurance commissioner is going to reduce the reserve requirements for them.

    Dan
     
    djs, Sep 24, 2008
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