Most people feel a strong need to ensure that their dependents are well taken care of should they pass away or become incapacitated. A solid life insurance policy can take care of these concerns should the worst case scenario ever happen and life insurance has become an integral part of most folks long term life planning.
As with most service industries these day the life insurance service provider industry is heavily populated and making the choice of which insurer to use is often the hardest part of the process. Horror tales abound of these companies defaulting on their policies or going belly up and leaving their clients out of pocket and, in many cases, with little time to make up the value of the previous policy.
This is why it is imperative that good, informed calls are made when choosing life insurance. A life policy is just that – a life long commitment. In many cases it is the longest lasting financial commitment many people ever make so the right choice at the start of the process is crucial. Here are a couple of pointers to assist with making that weighty decision.
One of the most effective ways of shopping for life insurance is to do your homework thoroughly before even starting to consider service providers. This will give you a good idea of how much cover you need, what type of policy will best suit your needs, how much you should expect to pay for that policy and how you will actually buy the policy.
The first point in this process is establishing a clear idea of your future needs. Forward calculators allow you get a good idea of what it would take to make sure your spouse and children can maintain their lifestyles in the case of your death.
The next variable that can play a role in your choice is whether you opt for term or cash value cover. The average working person between the ages of 20 to 50 would be best served with a term life policy while older people with substantial cash reserves would be advised to choose the cash value option.
One should then make a call on how you are to buy the policy. One could make use of agent or financial planner or buy the policy direct from the insurer. Each has their own benefits and cost implications. In the case of agents and financial planners get a clear idea of what the fee and commission structures of each are.
Once you have your ducks nicely lined up you are now well placed to make a sound, informed decision regarding which product to buy and how to go about it. It is also a good idea to check potential provider’s ratings prior to committing. Only use those with an “A” rating from institutions such as Standard & Poor’s, A. M Best or Duff & Phelps. If the company or advisor is not willing to divulge the rating or discounts a bad one, drop them immediately.
Choosing life insurance can be a daunting task and one needs to be well informed about the choices available and the workings of the industry before making a final decision. Only then can you make the kind of call that will serve your dependents well in years to come.
