A large percentage of life insurance customers know very little about the products they are inquiring about. Especially true for first time customers but very often just as true for customers who have purchased before. A quick confession right up front to your independent life insurance agent that maybe you could use some education and guidance will go along way toward ensuring you end up with the right product and actually understand why. Don’t be afraid to ask. No life insurance question should be too tough for a good agent to answer in simple enough terms that you will gain useful knowledge and confidence in what you are doing.
The top 10 questions we hear! 1. Should I buy whole life? 2. What term is best for me? 3. How much life insurance should I have? 4. Is the quote I got on the internet accurate? 5. Why are the rates on my current policy going up all the time? 6.Â How do I know this company will be in business if when my family needs them? 7. Why do you need to know all of that (referring to our health questions)? 8. Don’t you have something cheaper? 9. Where are you from? 10. Is it better to have a local agent?Â
I won’t blog you to death with detailed answers here, but….
1. Determining whether you need whole life, universal life or term insurance is really just a matter of answering the question, do you need that much coverage forever, or will the need go away after a certain time (term).
2. The length of the term should be as long as the need for the coverage and if you are unsure, and it is budget-able, take a longer term. You can always drop it, but you may not always be able to get it.
3. There are a hundred different ways to do a needs analysis, but the big three come down to replacement of lost income, dependent children and college if you want to cover that, and mortgages. Even if you can’t nail it down exactly, get close and put something in force. You can always add later if you see the need. ****Special note for husbands/fathers**** I have a personal philosophy about your role. If affordable, you should always strive to carry enough insurance to leave your family better off than they are right now. Why? Because you just don’t know what challenges they will face down the road.
4. The quote you get when you quote yourself on the internet has less than a 20% chance of being accurate. You need to review health, hobbies and family history with an agent to be able to get an accurate quote.
5. The rate is going up because you were sold a level term that has come to the end of its’ guarantee, you bought a yearly renewable term (bad idea), or you bought a whole life or universal life policy that was not guaranteed. All three of those situations are fixable and if you don’t fix it, it will get worse.
6. You don’t know if the company will be there, no matter how long they’ve been around or what their ratings are. That’s offset by the fact that if your company goes out of business it is highly unlikely that it will not be purchased by another company. The good news is that by law, the new company has to keep all the guarantees in place. Kind of like your mortgage being purchased. The check goes to someone else but everything else is the same.
7. I need to know all of that (the health questions) so I can provide you with an accurate insurance quote. I don’t want to call you up down the road and say that the wonderful quote I gave you didn’t come through because of health issues you could have told me about if I had asked.
8. Good question. In most cases there is something cheaper. In order to get there it takes less insurance or a shorter term. While I believe a good agent should always quote you the solution to your problem, budget always plays a part. And the bottom line is that something in force is always better than nothing.
9. Salida, Colorado. Right in the middle of the state.
10. Not necessarily. I know that sometimes it feels better to know that you have someone close, a hometown agent. You need to weigh that against an agent that has access to more companies. An agent who is licensed in all 50 states (and DC), so that if you move or if you have family in another state, that agent can service your needs. An agent who has a staff to serve you even if they are on vacation. Get quotes from both and talk about what you really want and need an agent to do for you.
11. I know this was a top 10 thing, but, can we get good rates for private pilots? Absolutely yes.
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.