Deciding which life insurance company to choose
Buying term insurance doesn’t have to be complicated, but it isn’t as simple as getting the best quote. Term life insurance [aka “temporary insurance”] like all life insurance, is a contract between the policy-owner (usually the insured) and the insurance company.
The first thing a consumer must keep in mind, is that the company they choose may be apart of their financial life for up to 30 years. This is a very long time in the business sense, as a company’s financial situation could change dramatically over that period of time, also, while a company being bought by another company shouldn’t change the premium or death benefit protection, it may change some of the opportunities you may have been given as a policyholder with the company that originally issued the policy.
These concerns don’t usually seem like a big deal to most people when they are young and they feel they have all the time in the world to make adjustments and change, and that may be partly true, but soon after most people take a life insurance policy, they believe they won’t have to think about it for a longtime, or even, ever again. And then there may come an unexpected event in the policyholder’s life, and suddenly they find out that the policy they chose, doesn’t have a provision they might have gotten with another company, or they misunderstood, or were never informed of an option they could now use.
Working with the right agent is crucial to optimizing your life insurance coverage
This is why it is crucial to work with an experienced, knowledgeable agent, someone who can tell you the pros and cons between different companies products, and through understanding your personal circumstance, advise you on what features, and which companies to choose from. The last item to worry about is the quote a premium based on a guess. Areas your agent should be able to explain to you are the differences between companies and products with regard to:
- Waiver of premium provisions
- Accelerated Benefit provisions
- Term to permanent policy conversion options and rules
- End of term options
- Reduction of face amount options
- Lapse and reinstatement provisions
- Rating improvement provisions
All of these things listed above, and more, are not usually on the mind of consumers in the beginning, but are important to know and understand before you commit to a particular company’s product, especially since this policy could be a part of your life for decades, and you may find yourself in need of a benefit that should have been included in the policy, but you were never given complete information about your product choices.