In this article we will give you life insurance policy advice before buying. Life insurance is something that most people know that they need, but don’t know all that much about. Many consumers gather most of their knowledge from their insurance agent or financial adviser, which is not always the best source of information. After all, these professionals are out to make a living. When selling a policy, most agents and advisers fail to mention these cold hard truths about life insurance:
- You may not need that whole life insurance policy.
The reason that most adults get life insurance is so that they can continue to provide for their children and spouse after their death. However, according to the CDC, the average life expectancy is 77.9 years of age. At that age, a policyholder’s children will be supporting themselves. As long as a person’s assets will support their spouse, they won’t need life insurance that late in life. For this reason, term insurance policies may be the better option.
- Most companies won’t go out of their way to find your beneficiaries.
Many people assume that their insurance company will contact their beneficiaries upon their death. Unfortunately, this isn’t always the case. Even though the insurance company’s annuities department knows about the death through Social Security records, they don’t share that information with the life insurance claims department.
The best way to make sure that benefits are paid is to let the beneficiary know about the policy. Beneficiaries should have the name of the provider, the value of the policy, and the policy number. The insurance company should also have the beneficiaries’ current phone number and address.
- Many insurance policies are a gamble.
What many people don’t know is that death benefits are not always a guarantee. Some permanent insurance policies have a “no lapse guarantee”, while others are not guaranteed at all. If a company doesn’t guarantee the death benefit, the benefit will be an estimate based on past market conditions. If the market takes a turn for the worse, the death benefit may decrease, premiums may increase, or both.
- Skipping the trip to the doctor will cost you.
Many people have seen advertisements for life insurance policies that do not require a medical examination. These policies can seem very attractive. Who wouldn’t want to save themselves a trip to doctor?
Unfortunately, these policies are also more expensive. The only people that benefit are those whose health has recently taken a turn for the worse. As long as you have good health, purchase a policy that requires a medical examination.
- You may not really need a policy.
Many people put off buying life insurance until middle age. By then, most families have sufficient assets to support their dependents upon their death. In this case, an insurance policy may be unnecessary.
Consumers need to purchase life insurance as soon as they start a family. Once a person’s dependents are old enough to support themselves, most people need much less coverage, if they need it at all. This is why it is so important for consumers to carefully determine their current and future needs before purchasing a policy.