5 Tips: What To Look For When Buying Life Insurance – Part 1
#1 Compare Prices When Shopping For Insurance
Because insurance premiums can vary widely (as much as 300-500%), you should always get quotes in writing from multiple respected companies. AmericaQuote represents America’s top insurance companies. When you fill out our Instant Life Insurance Quote form you will get multiple quotes from the companies that offer the best and most competitive products for your particular need. If you visit other sites, the same companies should appear.
We have found there are about five to seven companies that are consistently at the top of any spreadsheet. They are listed here – Our Recommended Life Insurance Carrier List.
Here’s one last suggestion on comparison-shopping. If you find an agent is pushing one company’s product, that agent may only represent one company. That should throw up a red flag and you may want to move on.
A second point… avoid part-time agents. You don’t want to trust a key part of your financial planning to someone with little experience and no knowledge of the companies’ underwriting practices (even if it’s your brother-in-law). Almost 90% of new agents drop out. Five to seven years of experience is recommended.
#2 Is the Life Insurance Company Financially Stable?
Does it make a difference who insures your life? We think it does! Many think the most important consideration in buying term or Universal life insurance is “cost.” Cost though important is a secondary factor. Finding a stable company to buy from is not a difficult task. Choose a carrier with superior financial ratings and a commitment to the insurance marketplace.
Life Insurance Ratings
In terms of financial stability, the last several years brought significant changes in the insurance industry. During the 1980s and 1990s, there were some “hot” insurance companies. Some of these are not in business anymore. It’s important to remember that when you buy life insurance, you are buying a decades-long guarantee well into the future. Some term insurance policies even have rate guarantees as long as life. If you can buy a product for about the same price as another, doesn’t it make sense to go with the higher rated company? You want to stick with companies that are rated A++ or A+ by the A.M. Best Company. On some occasions we will use an A rated carrier who is also considered excellent, though not in the highest bracket.
You can do your own research at the most respected source, the A.M. Best Company. Founded 1899 their mission is to report on the financial stability of insurers and the insurance industry. It is the oldest and most widely recognized provider of ratings, financial data and news with an exclusive insurance industry focus. Their letter grading system from A++ down to F makes it easy to compare ratings.