For each type of insurance sold to consumers today there are many potential questions that can go unanswered. Sometimes we don’t ask the questions because we are embarrassed by our lack of understanding. In other cases we simply do not know which questions to ask. Regardless of the reason why, many questions go unanswered it is important each person understands the terms and conditions associated with their insurance policy. This is especially true with life insurance — after all, you want to know that your loved ones will be cared for when you are no longer here to protect and provide for them yourself.
If you do not know the answers to the following questions talk to your life insurance agent to make sure you understand these important aspects of the policy and the company providing your coverage.
When you pay premiums to maintain a life insurance policy you want to do so with a company that is accessible. In a society where more and more people communicate electronically it is important to know in advance how and when you can communicate with your insurance agent. If you have a question can you pick up the phone and call or do you fill out a contact form via the Internet? When you call do you get your actual agent or a call center representative? You want a company that is easily accessible and always ready to help with any needs that may arise.
Your insurance agent should have access to all relevant data on the companies with which they work. The agent should be able to provide background information regarding the finances of each company to ensure your policy has the financial backing needed should a claim be filed. Using a company with a high rating ensures your ability to be paid on a claim when needed. Also consider the number of companies the agent represents — the more companies he or she has access to, the more likely you will get a policy tailored to your individual insurance needs. By getting multiple quotes from multiple insurance companies you are more likely to find the least expensive but still financially sound life insurance policy. In the process of shopping around, I finally settled on Genworth due to good recommendation from friends and their competitive pricing.
When choosing a life insurance policy you have to consider all expenses associated with the policy. Will you be charged one flat annual premium or should you expect additional fees to be applied to the account? This information is vital to determine whether or not the policy will be affordable in the long run.
No one can predict what will happen in the future. This is one of the reasons why we invest in life insurance. With this in mind you need to know what will happen if you face an unexpected financial hardship. Is there a grace period for missed payments or will your policy be canceled immediately? Do not assume that you will have the luxury of “making up” payments. Find out for certain what happens to your policy and any invested monies if you find yourself unable to make a timely payment.
The purpose of life insurance is to ensure your loved ones are taken care of in the event of your death. It is important that you and your beneficiaries understand the claims process to ensure the coverage that you have paid for is available when needed. Your agent should be able to explain this process in a clear and easy to understand manner. The process should also be written into your policy and include what actions the insurance company will take when a claim has been submitted.
We have touched on only a few basic questions that everyone should ask their life insurance agent. If you have a question that doesn’t appear here do not be afraid to ask your agent. A good life insurance agent will be able to anticipate important questions and often provide valuable information without being asked. If your agent seems unwilling or unable to offer clear, concise, and easy to understand information regarding your policy you may want to consider finding another representative for your life insurance needs.
The articles are written by personal finance enthusiasts (not certified professionals) based on their personal experience. What works for them may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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