A life insurance policy is more than a promise of money when you die, it is a financial tool that can be used to meet financial obligations and give your family a measure of security regardless of what should become of you. In order to choose the best type of policy and set it up for the most benefit, you need to ask your agent some key questions and make sure that you understand the process. Even more importantly, ask questions to determine whether this agent represents the best options for your financial future.
- Who Do You Represent?Some agents work for only a single insurance company, and others work for brokers that represent several different companies. It is important to know what companies you may be dealing with, and some information about them. You will want to know about each company’s financial rating with companies such as A.M. Best or Standard & Poor’s, how long the company has been selling insurance, and any recent financial or legal problems the company may have been experiencing.
- How Can You Help Me Meet My Long-Term Goals?Your agent can help you decide between term and whole life insurance policies, and tailor the policy you buy so that it will better assist your family, whether you are making a strategy to put your children through college or planning to leave an inheritance behind after you pass away.
- What are the Benefits of Choosing this Policy Over Another One?Value is important, so find out how the agent’s company differs from others. Lower premiums are one way to make a better offer, or decreasing premiums that are lower over time. Does this policy offer you a higher amount of coverage at the same price as a policy of a lower value from another company?
- How Much Coverage Do I Need?It is important to buy enough coverage, but buying more life insurance than you need is a waste of your money. An insurance agent can help you choose a policy and value that meets your life goals. Make sure that you are purchasing enough life insurance, but avoid agents who try to “sell you the farm,” so to speak.
- How Can I Make this Policy Work for Me?A whole life insurance policy accrues cash value that you can borrow against if needed. Some policies can even use the cash value to pay your premiums if you are not able to make them, effectively paying for itself after a few years. Find out how your premiums are going to be invested, and whether you have the option of choosing specific stocks or mutual funds to invest in, which can help you get even more value out of the policy.
- Who Should I Call if There is a Problem?If you have questions about you policy or you encounter a problem, it is important to know the process to get your situation resolved. In some cases, your insurance agent is your point of contact, but most of the time you will have to call a service center. Make sure you know who to call when you need them.