Life insurance is a topic that can be a double-edged sword. No one likes to talk about their mortality or the death of a loved one. However, one of the most important financial moves you make is make sure you pick the right company for you and your loved ones. Keep in mind, not all life insurance companies are the same. Here are a few tips to help you make the right choice.
Don't choose a company based on price alone
There's no doubt that price is an important factor in making the right decision for life insurance. In today's microwave society, where everything is at our fingertips, we sometimes choose an easy option.
Many companies and agents will quote low rates just to win the initial price comparison. Unfortunately, some of these companies have Strict underwriting, and the initial premium comes in higher. While gathering a few different quotes, consider underlying features. Insurance policies are not designed the same way. Terms of coverage, riders, and frequency of premium are all factors that will affect the price.
Only consider companies that are financially strong
Purchasing life insurance is a contract that will last many years. If you purchase a 30 year policy, or a whole life policy, you want to make sure that company is there to pay your loved ones. Most life insurance companies will post their ratings on their public websites. If you need help with this your agent should know where to find the ratings. Standard & Poor's, Moody's, an AM Best are good gauges to find ratings for insurance companies. Cash Reserves and claims-paying abilities are two major factors for insurance company ratings. Past performance can not guarantee future results, But an insurance company today with good claims paying ability will usually outperform smaller insurance companies in difficult financial times.
The type of insurance you're looking for will help determine the right company for you
Term insurance might be confusing on the surface, but in comparison to permanent insurance, it's a simple product.
When looking for the right company to purchase term insurance, consider flexibility and a competitive price. If you are in the market for permanent insurance, there are many variables and features to consider when looking for the right company.
Some insurance companies focus on cash accumulation, while others focus on death benefit. Mutual insurance companies are owned by policyholders, and their profits are paid to policyholders in the form of a dividend. A stock insurance company is a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them. A Fraternal Benefit Society is a special form of insurance company, owned not by stockholders, but by the members (the insured).
Conclusion
The type of insurance you're looking for, affordability, and strength of insurance company are three important factors when considering life insurance. Speaking for myself, the agent presenting the company is just as important. Do your research and consider doing business with someone you feel is going to help you along the way. This is a relationship business and trust is a must when I consider purchasing anything.