On my daily routine conversing with people about their life insurance portfolio, I often find that people who had purchased life insurance in the past were given poor advice or no advice at all. The end result is they may very well not have life insurance that is properly suited for their specific needs and budget. This problem can range from paying more in premiums than they should to having a Term life insurance policy that will terminate before their financial liabilities have ended. There is nothing worse than having life insurance terminate while you still need it. This all stems from poor planning at the time the application was originally taken.
The statistics show that over 68% of life insurance policy owners have a plan that does not meet their financial obligations.
Let’s take a look at a simple example such as this. Joe Stevens who will be our fictional example is 28 years old and has a new $325,000 30-year mortgage on the home he just purchased. The life insurance he purchased after he just purchased the home is a twenty-year Term policy for $250,000. What is wrong with this picture? The answer is two things are wrong. Number one if Joe passes away in the near future his spouse will have a check coming in the mail for $250,000 and will not be able to pay off the mortgage amount of $325,000 which will leave her short $75,000.
Also if Joe passes on in over a 20-year time period, his Term policy would have terminated and there will be no life insurance period. Joe would normally have had a conversion option to be able to convert the Term life insurance policy to Universal life insurance which is permanent insurance, but the premium very well may have been too high for him to be able to afford it. These types of problems are occurring to people on a regular basis.
Here do these very common life insurance blunders begin in the first place?
People such as our imaginary consumer Joe Stevens possibly went to a direct writer insurance agent such as State Farm, Allstate, Country Companies and others. The problem is they purchased their life insurance from an individual that sells only one brand of insurance and is an auto insurance specialist who on occasion sells a life insurance policy here and there. Joe might have told his State Farm agent that he needs to buy life insurance and that is exactly what Joe received was a life insurance policy which was written incorrectly.
The State Farm agent did not have the experience and expertise of an independent agent also known as a broker who specializes in the life insurance market exclusively. Joe simply does not know any better and he failed to do his homework and review all of his many options that would have been offered by a capable independent life insurance professional. The bad part about this is Joe’s dependents may have to pay the piper if this poorly written policy is not discovered prior to Joe’s unexpected death.
Purchasing your life insurance direct from the carriers with no agent involved, This is a big mistake just waiting to happen.
If you have an idea that purchasing your life insurance direct will offer any advantages your barking up the wrong tree. Keep one concept in mind, the life insurance premiums will be exactly the same no matter who you buy it from because all insurance rates are regulated by law for your consumer protection. This eliminates the used car lot effect where prices become a huge game with the sellers and consumers. If you apply direct, you will not have an agent to look out for your best interest by shopping the market for you and pre-screening any conditions such as health conditionsor a dangerous occupation or sport. It is critical to review the rates from several companies before you apply to make sure you know who will offer you the lowest life insurance premium for your specific application information.
On top of that you will probably be talking with an inexperienced person at the insurance company whose only job is to sell you a life insurance policy may it be the correct one for your needs or not. This same insurance company employee may have been flipping hamburger patties at Burger King last month and now they are selling you one of the most important products you will ever purchase.
There is a right way and a wrong way to buy life insurance.
If you are planning to purchase low cost Term life insurance anytime soon, contact an experienced independent insurance agent who will shop the market for you and locate the very best life insurance policy with the lowest premium and the proper plan design for your specific needs. Purchasing affordable life insurance is a very important event and you want to make sure it is done right for your dependents sake. If you are shopping for cheap life insurance that will just get you by or you are looking for a comprehensive life insurance portfolio, you want to do your homework and connect with an experience life insurance specialist to help you prevent making any mistakes. Don’t make a serious mistake and come up with an empty sack.
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Jack Venturi is the owner of BestChoiceLifeInsurance.com and is a licensed Insurance Broker with more than 25 years experience specializing in all forms of life insurance products. You may learn more about him at BestChoiceLifeInsurance.com