Business Magazine | BABM | Insurance

In terms of personal pleasure, buying life insurance is not in the same category as getting a new car or a spring wardrobe. It is a lot more complex and infinitely more important. The primary reason individuals purchase life insurance is to protect the financial security of their loved ones. It makes good sense then to use the same care in buying life insurance as you would when making any significant purchase. And whether you are looking for a new home or a state-of-the-art stereo system, shopping around for the product that best meets your needs is of utmost importance. Life insurance is no exception.

Before you begin your search for a life insurance policy, it is important to do some preparation. To help you determine the amount of insurance you need, you should identify your dependents (this may include children, parents, spouse), your financial obligations and your resources. This way, in the event of your death, your family will have the financial resources it needs to continue to run a household. A company representative or agent can help you find the right type and amount of insurance for your family's needs at an affordable price.

In addition, here are 10 things you should do to help you and your family make the most appropriate life insurance purchase:

1. Make sure your agent and company are licensed to do business in your state. Call your state insurance department if you are not sure.

2. Take your time. On the other hand, do not put off an important decision that protects your family. Make sure you understand fully any policy you are considering and that you are comfortable with the company, agent and product. Do not rush into a decision just because you are feeling pressured.

3. Ask your agent if the company offers any “healthy lifestyle” discounts on your policy. For example, non-smokers can save from 10 percent to 20 percent on their premiums.

4. Do not omit any part of your medical history on your life insurance application. If you do, the company may be able to refuse coverage, deny a claim or cancel the policy.

5. Read the insurance contract carefully and, if necessary, ask your agent for a point-by-point explanation of the language. Insurance policies are legal documents and you should be familiar with what they promise, even though some technical terms are used.

6. Expect delivery of your life insurance policy within approximately three months. If it does not arrive, contact the company for a written explanation.

7. Remember that you have a 10-day “free-look” period that entitles you to change your mind about purchasing the policy. If you do so, the company will return your premium, without penalty.

8. Write the check for your insurance premium to the company, not the agent. Be sure you are given a receipt. Pay premiums annually or semiannually, rather than monthly or quarterly, if possible. That way, the company saves money by billing you less frequently, and the savings are passed on to you.

9. Inform your beneficiaries about the kind, amount and location of any life insurance policies you own. Keep your policy in a safe place at home and, in addition, keep your insurance company's name and your policy number in a safe deposit box.

10. Review your life insurance coverage at least once every two years to be sure it meets your current needs. Be cautious if another agent or company contacts you and wants you to cancel your current policy to buy a new one. Contact your original agent or company before making any decisions.

All things considered, when you are purchasing life insurance, shop carefully, ask questions, and make sure you understand the answers. You would do the same with any other product or service that you buy.

Be Sure When You Insure Tips on Purchasing Life Insurance

Be Sure When You Insure
Tips on Purchasing Life Insurance