Twelve Secrets and Tricks to Buying Life Insurance

Twelve Secrets and Tricks to Buying Life Insurance

Twelve Secrets and Tricks to Buying Life InsuranceSecret 

# 1: Don't spend too much time on life insurance quotes.

Do not be fooled by the low prices that you get on the Internet - they do not apply to you if you are not very healthy. Statistically, only 10% of the people who apply actually receive the lowest price policy. The premium you end up paying has nothing to do with the original price you get online or from an agent. It amazes me how often I see people cheat on an agent who quotes company X at a lower price than another agent.

Life insurance policies have the same price, no matter who you buy from! A single agent or website citing a lower premium does not mean anything. Prices for any policy depend on your age and state of health. There are a few exceptions to this, but this is beyond the scope of this article.

Most life insurance companies have 10-20 different health / price ratings, and no agent or website can assure you that the quote they provide is accurate. You must apply, undergo a medical examination, and then underwrite (this means that you pass a mini exam with a nurse at home, and then the company checks your medical records and reviews and "evaluates" your health) to get a real price policy.Remember that your health rating also affects your family history, driving history, and type of profession. Use only quotation marks to narrow down your choices to the best companies. You can consider the option with no load or low policy. The more you save on commissions, the more money accumulates in your policy. You can even buy insurance without load and save on premiums. You will not get the help of an agent who can be worth something if he is very good.

The most important factor determining the price is the relevance of your particular health history to the company that is best suited for this niche. For example, company X may be best for smokers, company Y for cancer survivors, company Z for people with high blood pressure, etc.

Secret number 2: Ignore the hype on the terms of the urgent and monetary value of permanent insurance.

You can go insane by reading what everyone has to say about buying term insurance against an entire or universal life insurance policy. Well-known websites provide tips that, in my opinion, border on fraud. Simply put, there is NO simple answer to the question of whether to buy policies for a constant cash value or term of insurance.

But I think that there is a simple rule of thumb - buy a term for your temporary insurance needs and cash insurance for your permanent needs. I read in various magazines and myself I run mathematical equations that basically show that if you need insurance for more than 20 years, you should think about a certain amount of permanent insurance. This is due to the tax advantage of rising cash value as part of an ongoing policy. I am divorced and take care of my children if I die. I probably no longer need such insurance as now.I earned a lot of income from my policies and did not pay taxes. I no longer pay insurance premiums because there is so much money in policies. I let the policies pay myself. I would not call most life insurance a good investment. Since I bought my policies correctly and almost did not pay sales commissions, my policies are probably my best investment. I no longer own them, so when I die, my beneficiaries will receive money both without tax and without real estate tax.

Since most people have short-term needs, such as a mortgage or kids at home, they need to get some time. In addition, most people want to have life insurance for life to pay for the funeral, to help with unpaid medical bills and property taxes, and therefore you need to purchase a permanent policy along with the term policy.

Secret No. 3: Consider applying to two companies at once.

Life insurance companies really don't like this “trick” because it creates competition for them and increases insurance costs.

Secret No. 4: Avoid captive life insurance agents.

Look for a life insurance agent who represents at least fifty life insurance companies, and ask them for a quote from several companies showing the best prices nearby.Some people try to disable the agent and just apply online. Just remember that you do not save money in this way, because the commissions that the agent usually receives are withheld by the insurance company or insurance company on the website without reducing your premium.

In addition, a good agent can help you overcome some of the difficulties associated with filling out an application, setting up your beneficiaries, avoiding mistakes in choosing who should be the owner, the best way to pay your premium, and will also be willing to provide check and help your loved ones if ever used life insurance.

Secret number 5: think about refinancing old life policies.

Most companies will not tell you, but the price you pay for your old policies has probably dropped dramatically if you are in good health. In the past few years, life insurance companies have updated their forecasts on how long people will live. As we live longer, they lower their rates quite sharply. Be careful, the agent can do this to get a new commission, so make sure it’s

I am really amazed at how often we find that our client’s old policies are twice as expensive as new ones. If you need new life insurance, consider “refinancing” your old policies and using the savings from old policies to pay for a new policy — so there is no extra cost out of your pocket. We like to think of this process as “refinancing your life insurance” - just like you refinancing your mortgage.

Secret # 6: Recognize that life insurance companies have targeted niches that are constantly changing.

Once the company “X” offers good rates for overweight people, and next month they are very strict. Company “Y” can be condescending to people with diabetes, because there are not many diabetics in the books - this means that they will give good indicators to diabetics. At the same time, W can be very strict with regard to diabetics because they insure a large number of diabetics and are afraid that they have too much risk in this area - that is, they will give a bad assessment to the new diabetics who are turning.

Unfortunately, when you go to a life insurance company, you won’t say, “Hey, we just raised our rates for diabetics.” They will just be happy to take your money if you are not smart enough to go shopping. This is the number one area in which a smart agent can come in handy. Since a good agent from several companies constantly works with several companies, he or she will deal well with those who are currently the most lenient about underwriting for your specific situation.The problem is that this is hard work, and many agents are either too busy or not configured to effectively choose between different underwriters and look for who will make you the best offer. This is a lot more complicated than just quoting you online.

Secret No. 7: Do not forget customer service.

Most people shopping for insurance focus on companies with the lowest price and best financial rating. Unfortunately, I know some low-rated “A +” companies that I wouldn’t touch with a ten-foot pole simply because it’s easier to give birth to a porcupine back than to get customer service from them.

Before I realized this, I used a life insurance company that gave the customer an excellent rate, but after 2 years the customer called me and said: “I sent all my payments in the mail on time, but I just received a notification that my policy expired. " It turned out that the company made many mistakes in the back office and lost the bonus!

We managed to fix it because we discovered the problem so early. But if the client died within a short period of time when the policy expired, it might be difficult for his family to prove that the premium was paid on time and they might not receive money for life insurance - the loss of hundreds of people. thousand dollars in this case.

Secret No. 8: Submit an application 3-6 months before the time you need insurance, if possible

Do not rush to get a policy if you already have a valid coverage. But submit an application and immediately apply, knowing that it may take you months to go shopping if the first company does not give you a good bet. Even though the life insurance industry is becoming more automated, your application will often be delayed for weeks or months while the insurance company waits in your doctor’s office to send them a copy of your medical records.

If you are in a hurry and buy a “no insurance” policy without going through the full health and insurance checks required by the main life insurance company, you will end up paying 20-50% more because the insurance company will automatically charge you higher rates, because they don’t know if you are healthy or are going to die the next day.

Secret No. 9: Avoid buying extra life insurance if you are healthy.

I'm sure there are exceptions to this “trick”, but I rarely found it. Be sure to keep the free life insurance provided by your employer. But if you are healthy and pay extra deduction for life insurance, you almost certainly pay too much. What happens is that your “overpayments” end up subsidizing unhealthy people in your company who buy life insurance by deducting it from your salary.

Typically, a life insurance company makes a deal with your employer and refuses a mandatory medical examination for all employees - instead, they simply average the price for all employees and offer one or two rates for men or women at any age.Life insurance companies know that in this way they take a lot of unhealthy clients, so they raise the price for everyone so that healthy people end up overpaying so that unhealthy workers get a cheaper policy. In addition, unlike the guaranteed term policies that we recommend, most of the life insurance you buy through work becomes more expensive with age.

In addition, group life insurance is generally not portable when you retire or change your job, which means that when you retire or change your job, you may have to apply again, even if you older and probably not as healthy and risk getting a waiver of politics. If a group plan allows for portability, they usually limit your conversion choices and force you to switch to expensive pricing plans.

I remember helping someone value his extra life insurance. He was sure that it was a better deal than any policy I could find for him. Did he know that the price of his group plan would grow every year? By the time he resigned, his premium would have risen to over $ 10,000 a year. I found his policy of about $ 1,000 a year, which will never grow. In addition, unlike his former group politics of life, he could take an individual policy with him when he changed jobs or retired.

Secret No. 10: Make a trial application based on cash on delivery.

Send money with the application only if you need to immediately receive life insurance. Sending a check with the application is a traditional practice that agents are used to doing - I think, mainly because it received them faster commissions.If you send money along with the application, you usually get temporary coverage right away, but if you already have enough coverage and are just trying to get better rates, ask your agent to submit a trial application on cash on delivery terms so that you pay only after approval politicians. If you do not send the money and die before you pay for the policy, insurance will not be covered.

Secret No. 11: Wear shoes when a nurse measures your height.

When the insurance company sends a nurse to check your health, try to be as tall as possible if you are overweight? In most states, you are allowed to wear shoes, and if you are slightly overweight, your higher height / weight ratio will look a little better for the insurer, which determines your health rating and the price of the policy. Also, take your exam early in the morning without food - this will make your cholesterol level and various health indicators look best.

Secret No. 12: be careful with extra perks and riders.

Most policies include options such as accidental death allowance, child riders, disability riders, premium refunds, etc. Life insurance companies seek to make money, and these riders tend to be profitable because they either cover what rarely happens, or they are so strict that the allowance is never paid.

Secret No. 12: be careful with extra perks and riders.

Most policies include options such as accidental death allowance, child riders, disability riders, premium refunds, etc. Life insurance companies seek to make money, and these riders tend to be profitable because they either cover what rarely happens, or they are so strict that the allowance is never paid.Keep things simple and focus mainly on getting a life policy to embrace your life without a lot of conditions. Again, a good agent can help you evaluate the benefits of additional riders. But be careful with an agent who is trying to get around all possible additional racers.