How to Compare Life Insurance Policies With Different Companies
When considering life insurance, it is important to compare policies offering the same types of benefits for the premiums you will be paying. With so many types of life insurance policies with countless combinations of riders, you can become easily confused and unsure about your best option. As you look for life insurance quotes, make sure the insurance agent or broker is showing policies based on a specific set of parameters such as death benefit, duration of coverage and added insurance riders.
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Instructions
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Define the type of life insurance you want to obtain. Term insurance is only good for a period of time and then ends where permanent insurance like whole life or universal life insurance remains in effect until you die. Always compare term insurance policies against other term policies and permanent policies against other permanent policies.
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Establish how much in death benefits you require and set this as your standard request. If you anticipate needing $500,000 to pay the mortgage off and give your wife enough assets to live off of for ten years, make sure all policies start with this amount of coverage.
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Provide the insurance agent with a consistent lifestyle history. While you probably won't go into a complete medical history prior to your application, remain consistent with telling the agent about smoking habits, chronic health issues and family history. This helps to give a proper quote based on the basic history.
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Add riders one by one to a policy quote and add the same rider to any other quotes you are looking at. Riders are additional insurance benefits available under defined circumstances. A rider can convert a term policy to a whole life policy or even provide coverage for a surviving spouse, creating a second-to-die policy.
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Examine the premium costs side-by-side for each policy quote.
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Compare the costs of the insurance policies. Surrender charges are fees for canceling a policy in the early years; some policies may have shorter surrender periods. Also look at the cost of insurance and see how it may affect the cash value in a permanent policy.
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Look at the investment options in the insurance policy. Fixed rate policies will show less cash value growth over time where variable policies may seem attractive but are not guaranteed. Establish your comfort level with the investment options.
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Tips & Warnings
Ask many questions when seeking insurance quotes. If something seems too good to be true, get a second option from a tax adviser or financial consultant.
