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With
the convenience of the Internet, the process of buying life insurance, has
become much simpler. The following steps will help take the mystery out of
insurance along with helping you get the policy that fits your needs.
- Decide what kind of
insurance to buy. Depending on the purpose, you may want Term,
Whole Life, or
Universal.
- Do some personal
analysis to determine the amount of coverage you actually need. You can
either compute an income multiple—your annual earnings multiplied by at
least 3 and preferably 5—or you can add up your outstanding debt and
estimate your family's needs.
- Take advantage of our user
friendly service to complete a profile and then either shop rates
yourself from the online quoting engine or request a local agent to
prepare quotes for you.
- While waiting for your
cost quotes to be prepared, you can check the
ratings on several companies. You want a company that is strong
financially, has been in business a long time and that pays claims in a
timely manner.
- If you decide to meet with
an agent personally, be prepared to ask some pointed questions:
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To what extent would
that agent represent you?
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Does the company have
policies that will last to age 100 or even to 120.
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Does the company have
radically higher rates for smokers
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Does the company require
a visit from a paramedic? Some companies only require a paramedical
exam and doctor's report on amounts of 100,000 or more.
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Does the company have an
"easy issue" policy that requires less medical underwriting and that
pays without a two year waiting period?
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What payment process
does the company use? Most require you to make the first payment and
then authorize automatic bank draft for future payments.
- Strongly consider using an
agent. Life insurance does not have standardized language from one
company to the other. If you try to do it alone, you could easily end up
with something like "modified whole life," a type of whole life that has
cash value and insures you to age 100, but also has premiums that
increase at a predetermined frequency. If an agent misinforms you
regarding a policy, the company is responsible. If you make the decision
on your own, you bear the responsibility even if you don't understand
the terms.
- Once you have decided on a
policy and answered the questions for the application, all you have to
do is wait. You still aren't fully committed. By law, you have a 30 day
free look from the time your policy is delivered to you. If you see
something you didn't expect or didn't want, you can return it and have
your first payment refunded.
Usually, a little
preparation, an open mind and an understanding of the process can
virtually guarantee a policy that will satisfy you and your family for
many years to come.
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