“Don’t Be Shortsighted! It’s More Than Just Price!”
Whether you are shopping for a new term policy or trying to replace your existing one, there are a few key things you need to consider when comparing policies. Let’s face it, term insurance is basically a commodity and most commodity purchases are made based strictly on price. However, with term life prices being so close among the major insurance carriers, you should look beyond the costs and focus on the best value. Below are some of the more important considerations when purchasing a term life insurance policy.
- Policy Guarantees. Is the life insurance face amount guaranteed? Is the premium level and if so how long is it guaranteed? When comparing policies, the longer the guarantee, usually the more expensive the policy. Keep this in mind and weigh the policy guarantees against how long you really need the coverage.
- Insurance Company Financial Strength. Obviously, there are some insurance companies that maintain higher financial ratings than others. With prices being relatively close, usually within 5-10%, why not get a highly respected well known company that has great financial ratings with the independent rating services?
- Conversion Options. Most term policies have a conversion privilege that allows you to exchange your term policy for a universal life or whole life policy without proof of health. In other words, if you become uninsurable, the conversion feature protects your insurability and guarantees that you can continue coverage by “converting” your term policy to a more permanent plan. When comparing policies, ask about the conversion option. If everything else is the same, the policy with a longer conversion period is usually going to be the better choice.
- Your Agent Should Be Your Advocate! Sure term insurance is relatively easy to understand and hopefully you will never have to use it. But there is no substitute for having a professional agent. Unfortunately, most life insurance agents forget about their clients once the policy is delivered. Don’t settle for an agent that will not provide the service you deserve!
- Do the Policies Contain Riders? A rider is a benefit that is added to your policy for an additional cost. If riders are included, the price for the policy will be higher and not be comparable with a policy that contains no riders. When reviewing policy options, make sure that you are comparing “apples to apples”. For more information see, Life Insurance Riders Defined.
- How is the Insurance Company Going to View your Health? One of the most important factors when trying to choose the best insurance policy is the underwriting guidelines of the insurance company. Each company has its own unique guidelines for determining your risk level, called underwriting guidelines, which eventually determines your rate for life insurance. Understanding which insurance company will give you the “benefit of the doubt” given your health circumstances, will go along way to making sure you get the best policy!
- It All Comes Down to Price! Why would you pay more for the same thing? The simple answer is you shouldn’t! If everything else is equal, buy the cheapest policy. Just don’t make the mistake of paying only slightly less for something that offers significantly less without understanding the facts.
When comparing term life insurance policies, you should look beyond price alone and focus on VALUE! Term insurance rates are so competitive now that in many cases you can get a better policy without having to pay considerably more. If you compare policies on an “apples to apples” basis, you can get a guaranteed policy from a recognizable and highly rated insurance company for relatively the same price as the cheapest priced policies in the marketplace. Finally, you must select an experienced insurance agent that understands the “underwriting environment” and will do the “due diligence” required to get you the best policy. Don’t make a mistake and just pick the company that quotes the lowest price!
Call MEG Financial today at (877) 583-3955 and we will help you find the term insurance policy that offers you the best value.