Top and Best Tips for Buying Life Insurance

Don’t Spend Too Much Time on Life Insurance Quotes

Don’t be fooled by the low-price quotes you find online – they don’t apply to you unless you are extremely healthy. Statistically only 10% of people who apply actually get the lowest priced policy. The premium you pay has nothing to do with the initial bid you get online or from an agent. It’s surprising to me how often I find people duped by an agent who quotes company X at a lower price than another agent.

Life insurance policies are priced the same no matter who you buy from! There is no point in quoting an agent or website a lower premium. The prices of any policy are based on your age and health. There are exceptions to this but that is beyond the breadth of this article.

Most life insurance companies have 10-20 different health/price ratings and no single agent or website can assure you that the quote they give you is accurate. You have to apply, get a health check, and then go through underwriting (which means you complete a mini-exam with a nurse in your home, and then the company checks your doctor’s records and reviews and ‘rates’ your health). policy price.

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Remember that health ratings also affect your family history, driving record, and the type of business you do. Use only quotes to help narrow your choices down to the top companies. You can consider a no load or low policy. The more you save on commission, the more money is accumulated in your policy. You can also buy term insurance no load, and save a lot on premium. You won’t get the help of an agent who, if very good, maybe worth something.

The most important factor determining the price is matching your particular health history with the company that is best suited for the niche. For example Company X may be best for smokers, company Y for cancer survivors, Company Z for people with high blood pressure, etc.

Ignore The Hype on Term vs Cash Value Permanent Insurance

You might go crazy reading what everyone has to say on buying term insurance versus whole or universal life policies. Big-name websites give advice that I think has limits on fraud. Simply put, there is no easy answer about whether you should buy permanent cash value policies or term insurance.

But I think there is a simple rule of thumb – purchase term for your temporary insurance needs and cash value insurance for your permanent needs. I have read in various magazines and ran mathematical equations myself which basically shows that if you need insurance beyond 20 years then you should consider permanent insurance of some amount. This is due to the tax advantage of increasing the cash value within a permanent policy. I am divorced and have taken care of my children if I should die.

I probably don’t need as much insurance as I do now. I have earned very good returns on my policies and have not paid any taxes. I no longer pay premiums as there is a lot of cash in the policies. I let the policies pay for themselves. I would not call most life insurance a good investment. Because I purchased my policies correctly and paid almost no sales commission, my policies are probably my best investment. I no longer own them, so when I die my beneficiaries will get both wealth tax free and estate tax free.

Since most people have short-term needs such as a mortgage or children in the house, they should be able to meet some period. Additionally, most people want to have some life insurance to pay for burials for the rest of their lives, help with unpaid medical bills and property taxes and so a permanent policy should be purchased along with a term policy.

Consider Applying to Two Companies At Once

Life insurance companies really don’t like this “trick” because it gives them competition and increases their underwriting costs.

Avoid Captive Life Insurance Agents

Find a life insurance agent that represents at least fifty life insurance companies and ask them for a multi-company quote that shows the best prices side-by-side. Some people try to cut the agent and just apply online. Just remember that you don’t save any money this way because usually the commission earned by the agent is only kept by the insurance company or website insurance company without reducing your premium.

As well as avoiding mistakes in filling out a good agent application, setting up your beneficiaries, choosing who should be the owner, the best way to pay your premiums, and also through some of the complications to distribute can help you intervene. Check and help your loved ones if life insurance has ever been used.

Consider Refinancing Old Life Policies

Most companies won’t tell you this but if you’re in good health the price you pay on your old policies has dropped dramatically. Over the years life insurance companies have updated their predictions about how long people will live. Since we are living longer, they are reducing their rates dramatically. Be aware that the agent is doing this to get a new commission, so make sure it really makes sense.

I am really amazed at how often we find that our customer’s old policies are twice as expensive as new policies. If you need new life insurance, consider “refinancing” your old policies and using the savings on the old policies to pay for the new policy – that way there are no additional out-of-pocket costs. We like to think of this process as “refinancing your life insurance”—just like you would refinancing your mortgage.

Realize that Life Insurance Companies have Targets Niches that are Constantly Changing

One day company ‘X’ is offering good rates to people who are a little overweight and next month they are super strict. The company may be generous towards people with ‘Y’ diabetes because they don’t have many diabetics on the books – meaning they will give good rates to diabetics. Also, Company ‘W’ can be very tough on diabetics because they are insuring too many diabetics and fear they have a huge risk in that area – which means they are giving bad rates to new diabetics, who apply.

Unfortunately when you’re applying for the life insurance company won’t tell you, “Hey, we just raised our rates for diabetics.” They’ll happily take your money if you weren’t smart enough to make the purchase. This is the number one area a smart agent can come in handy. Since a good multi-company agent is constantly applying to multiple companies, he or she will have good control of who is currently most generous on underwriting for your particular situation. The problem is that it’s hard work and many agents are either too busy or unwilling to skilfully shop around different underwriters and see who will give you the best offer. This is much more difficult than simply running you an online bid.

Don’t Forget Customer Service

Most people shopping for insurance focus on the companies with the lowest prices and the best financial ratings. Unfortunately, I know of a few A+ rated companies with low rates that I wouldn’t touch with a ten-foot pole, because it’s easier to breed a porcupine on the back than get customer service from them.

Before I understood it, I used a life insurance company that gave a great rate to a customer, but after 2 years the customer called me and said, “I have mailed all my payments on time, But I just got a notice that my policy has expired.” It turned out that the company was making a lot of back-office mistakes and had lost premium payments!

We were able to fix it because we caught the problem so early. But if the death of the subscriber had the policy terminated during the short term, his family could find it difficult to prove that premiums were paid on time and they may not have received the life sum assured – hundreds Loss of thousands of dollars in that case.

Apply 3-6 Months Before the Time you Need Insurance, If Possible

If you already have some coverage then don’t rush to get the policy. But go ahead and apply immediately knowing that if the first company doesn’t give you a good rate it could take months before you make a purchase. Even though the life insurance industry is becoming more automated, your application will often be put on hold for weeks or even months while the insurance company waits to mail a copy of your medical records to your doctor’s office.

If you’re in a hurry and buy an accelerated ‘no underwriting policy without the full health check-up and underwriting that a mainstream life insurance company requires, you’ll end up paying 20%-50% more because The insurance company will automatically charge you more because they don’t know whether you are healthy or are going to die the next day.

Avoid Buying Additional Life Insurance Through Work if you Are Healthy

I’m sure there are exceptions to this “trick” but I’ve rarely found one. By all means, have free life insurance provided by your employer. But if you’re healthy and you’re paying for supplemental life insurance through payroll deductibles, you’re almost certainly paying too much. What’s happening is that your ‘overpayment’ subsidizes the unwell people in your company who are buying life insurance through payroll deductions.

Usually, the life insurance company has an agreement with your employer and will omit the required health exam for all employees – instead they average the price for all employees and one for men or women at any age or Offer two rates. Life insurance companies know that they will pick up too many unhealthy customers in this way so that they can increase the price on everyone so that healthy people have to pay more so that unhealthy workers can get a cheaper policy. Also, unlike the guaranteed term policies that we recommend, most of the life insurance you buy through work will become more expensive as you get older.

Plus group life insurance is generally not portable when you retire or change jobs, which means you may have to reapply when you retire or change jobs, even if you get older. And will probably not be healthy and the risk to the policy will be turned down. If group plans don’t allow for portability they usually limit your conversion options and force you to move to expensive cash value plans.

I remember helping someone evaluate their supplemental life insurance. He was sure it was a better deal than any policy I could find. Little did he know that the price of his group plan would increase every year? By the time he retired, his premium would have exceeded $10,000/year. I found him a policy for about $1000/year that will never go up. Also, unlike his old group life policy, he could take the individual policy with him when he changed jobs or retired.

Do a Trial Application on COD Payment Basis

Send money with the application only if you need life insurance coverage immediately. Sending a check with the application is a traditional practice agent is used to – I think mostly because it got them their commission faster. If you send money with an application you usually get temporary coverage right away, but if you already have a lot of coverage and are looking to get better rates ask your agent for a trial application on a COD basis So that you pay only after the policy is approved. , There is no coverage if you don’t send the money, and you die before paying for the policy.

Wear your Shoes When the Nurse Measures Your Height

When the insurance company sends a nurse out to check on your health try to be as tall as possible if you are overweight? In most states, you are allowed to wear shoes and if you are slightly overweight then your tall height/weight ratio will look slightly better to the underwriter who is determining your health rating and policy price. Also, take your test early in the morning with no food in your diet – this will get your cholesterol count up and the various health ratios looking the best.

Beware of the Extra Perks and Riders

Most of the policies come with options like accidental death benefit, child riders, disability riders, return of premium, etc. If you do the math on most of these “extras” they usually don’t make smart financial sense. Life insurance companies are out to make money and these riders are usually profitable because they either cover something that rarely happens or they are so tight that benefits are never paid. Keep things simple and primarily focus on getting a life policy to cover your life with no strings attached. Again a good agent can help you weigh the benefits of additional riders. But beware of an agent who tries to deal with every possible extra rider.

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