Speak with an experienced advisor! Questions to ask about Term Life Insurance
When buying Term Life Insurance, there are some very specific questions to ask about your proposed insurance policy. Don’t stop there though – ask these 19 Questions of your Life Insurance Agent.
Learning to ask the right questions about your proposed life insurance policy could save you tons of money.
First Term Life Insurance Question
“Is this Term Life Insurance Policy the Right Length for me?”
The subject of policy length for term life insurance is extremely important. How long to buy a life insurance policy for? There are many methods and formulas that we have seen over the years that assist clients in choosing term life policy lengths. However, all of the tools in the world will not help you if you do not personalize your decision.
Not everyone has the same needs and it is always possible that any given insurance agent will misunderstand your needs. Don’t let that happen to you! Ask yourself, why am I buying life insurance? And how long will the need for life insurance be around?
For many the length of life insurance to buy is based on their youngest child attaining college age. For example a new mother may want to consider purchasing a level twenty year term policy. Another example may be a father of a seven year old boy purchasing a level fifteen year term life policy.
If the term life policy though is used for some other financial reason, such as a mortgage, you will want to keep your eye on that financial length. For example a thirty year term life policy to assist in paying off a mortgage.
Second Term Life Insurance Question
“Is this Term Life Insurance Policy the Right Coverage Amount for my family?”
When I say coverage amount, of course I am referring to Benefit amount or.. death benefit.
The coverage amount or face value of the life insurance is the amount that the policy will pay out on a payable claim. In other words “Is this coverage amount the right amount for my family?”
Calculating needed coverage amounts is tricky. Honestly its usually a cross between what is needed and what is affordable. The old rule of thumb was ten times yearly earnings. In today’s modern world of two working parents – that calculation is not so simple.
The good news is that term life insurance is pretty inexpensive these days. Given its low cost, 10 earnings for both earners is often possible. If not, 6-8 times earnings for each may suffice.
There are of course more complicated methods to calculating life insurance needs, which sold a solid life insurance agent will be happy to assist you with.
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Third Term Life Insurance Question
“Does Term Life Insurance Company have a good Financial Strength Rating?”
The financial strength rating is one of the important factors needed when buying life insurance. This site has dedicated numerous articles to this subject. In simple terms the Financial Strength Rating is an assessment by a credit rating agency of an insurers ability to pay back claims. Distinct from a credit rating, a financial strength rating is pertinent to claims. And in life insurance, that is why you are buying the policy.
The problem is, that very very few insurance agents discuss the topic.
You need to ask this question, but don’t just rely on their answer… Check the rating of the insurance carrier yourself. Try AM Best, Fitch, Etc. Look for their Financial Strength Rating.
Avoid pulling this information of agency websites. Attempt to pull them directly from the rating agencies sites themselves. Occasionally non updated ratings linger on older sites longer than they should. Financial Strength Ratings do occasionally change.
Fourth Term Life Insurance Question
“Will this Term Life Company Place Me at the Best Class Available?”
Some basics here first. Life insurance is rated by numerous factors. Those factors include Date of Birth, Sex, Health Factors, Smoking Status, Dangerous Actives. And those factors will place you within a “rating class.” The rating class is really just insurance short hand for the price level that they will offer you.
Super PREFERRED
Super Preferred is reserved for only the most healthy safe invididuals
Preferred
Preferred is exclusive, but allows for a few minor issues.
Standard Plus
Standard Plus allows for more underwriting issues.
Standard
Standard is the lowest non table rated option.
Getting priced into the most accurate health class will give you a more clear version of the future pricing of your life insurance policy. Any insurance agent can build up false hopes of the lowest class only to fail to deliver. The best agents will be both pragmatic and honest with all clients are the reality of those classes.
The best independent life insurance agents will often start off the pricing discussion with a quick underwriting review of your situation. Asking about your health, work history, and what you like to do for fun. As with all insurance, being honest is your best bet.
What to Do!
Now that you are armed with some basic life insurance questions – Don’t be afraid to ask them.
Your financial future is your matter. No One will be a better guide than you. Ask questions, read, and learn.
Contact us today for a free quote and life insurance evaluation.
sales at marindependent dot com – 415-294-4555
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