Saving money on life insurance is so much easier than most people think. But it requires Action and Thought.
Initial Life Insurance Thoughts:
Part of the reason that life insurance is often so confusing is that there are so many different types of life insurance. Getting your head around the various types is the first step. Once you are fully knowledgeable about the various types you are ready to save money using this simple five step plan.
Step One For Saving Money on Life Insurance: Beware of Buying Any Type of Life Insurance for any reason other than Pure Insurance:
It is often said that whole life insurance is sold and term life insurance bought. There are lots of reasons for this, but generally speaking, the whole life insurance pitch may involve potentially using the life insurance for reasons other than pure insurance. If you are interested in mixing your insurance needs with your investments – you better do your homework. Whereas pure insurance, called term life insurance is fast, simple, and easy to understand; whole life is anything but this. Whole life insurance is also often hard to compare one product against another,
The real reason though is that if you want to save money on life insurance, whole life is almost always more costly. Does that mean that you should never buy whole life insurance? Of course not, there are still good reasons for consumers to consider cash value life insurance plans such as whole and universal life insurance.
Step Two for Saving on Life Insurance: Ask lots of Questions:
Asking lots of questions from your life insurance agent will help you for many reasons. What to ask them?
-Are you an Independent Insurance Agent?
-Are you a specialist?
-Can I Get Temporary Life Insurance while you Process this?
-Are you licensed and Insured yourself?
-What type of Life Insurance Do you Have?
-How Often Do you Work with this Life Company?
-How Long Do you Think I Should Have Life Insurance for?
All of these questions likely will assist you in your quest to save on life insurance.
Step Three for Saving on Term Life: Get Lots of Quotes:
Getting multiple insurance quotes seems obvious, but it’s often not done. One of the benefits of contacting an independent life agent is the possibility that they can run lots of those insurance quotes for you. However, it’s still best not to just depend on just one agent. Contact and Speak with at least two different insurance agents concerning your life insurance purchase.
One thing you may find is that different insurance agents may recommend different things. Why that is is extremely important.
The obvious reason though for gathering up lots and lots of insurance quotes is to choose the lowest premium, with the most benefit, using the highest rated insurer (see below.)
Step Four for Saving on Term Life: Check the Financial Strength Rating:
A Financial Strength Rating is an “Opinion” of an Insurers ability to meet claims and other obligations. Probably the simplest place for end users to check FSRs is to visit ambest.com
There you will see rating grades all the way up to A++. In general shoot for A- and higher for most life insurance policies. If you are indeed buying a whole life or annuity policy than you may even want a higher rated carrier than A-. There are other rating agencies that you should consider checking as well such as Fitch Ratings. Please note that each rating agency has their own grading scale and lettering system.
Choosing a more financial solvent insurer could potentially save you a boatload of cash at some future time. However, choosing a higher rated insurer may not necessarily save you money.
Step Five for Saving Money on Life Insurance: Don’t Sign Stuff you Don’t Understand:
This again may sound simple, but many people ignore this common sense rule. From an insurance agents standpoint, term life contracts are far less complicated than many other forms of insurance. You should be able to read and understand most of the agreement. If there are things in the application that you do not understand, contact your life insurance agent with your questions before you sign them. By avoiding signing things you don’t understand you will be less likely to be taken advantage of, and this can help you save money on life insurance.
Summation of How to Save Money Buying Life Insurance:
Follow these simple rules to save money when purchasing life insurance. Remember for families, both spouses, working or not, probably need some form of term life insurance.