5 Life Insurance Tips

A life insurance policy can provide financial protection for you and your dependents. Before you purchase such product, it is important to understand why you need it so you can get the best life insurance quotes. Don’t buy a policy just because you have to, or someone says you should. These 5 life insurance tips will help you make the right decision:

1. Work with an independent broker

An independent broker will have access to more product than a firm and will offer you many options. If the broker recommends a policy in the first meeting, before analyzing your situation and needs, politely decline it and keep searching. Ask many questions so you fully understand the product. It is important to know if the policy is renewable or non-cancelable, if there is an accidental death rider and how long are the premiums guaranteed for.

2. Avoid young and old advisers

Advisers usually tend to sell to people their own age, because they have natural markets. New advisers are young most of the time, and so are first-time buyers. If both parties are inexperienced, you probably won’t get the best deal. An old adviser may be out of touch with your needs and unable to provide the best life insurance tips. He or she also has more experience in selling and can make recommendations that you won’t fully understand.

3. Understand how the broker or adviser gets paid

Before you make a commitment, find out if the broker or adviser gets paid through commission, fee or fee plus commission. If they receive a commission, there might be a conflict of interest involved, so make sure you look at all options available. If the adviser answers your question vaguely or claims to know it all, consider working with someone else.

4. Avoid buying from a bank, association or employer

Banks sell products such as mortgage life insurances that are unaccountable. Because they cut costs to their shareholders, it is possible that you won’t receive the best life insurance tips and value. An alumni or a professional association have non-guaranteed rates in most cases. This entities are not flexible and usually they select the insurer. Some employers offer modest insurance coverage and most of the time people discover it isn’t enough. Avoid adding more to that type of policy, and instead buy your own coverage.

5. Consider future costs

Before you purchase a life insurance policy, calculate how much you actually need. Consider future costs like home improvement costs, school fees and university fees. Some plans seem inexpensive until you renew them, but they can increase by 500%. If you only want to cover a mortgage, a term insurance can be the best option. It is also important to stay fit and healthy so you can apply for a new insurance when it expires.