Tips for Buyers

Many people purchase insurance through insurance brokers. In general, brokers provide all types of insurance. You might want to buy all your policies from the same broker (by doing so, you may be able to consolidate your premium payment), but you also may want to shop around. Different policies and types of insurance can vary in cost from institution to institution.

Tips

  • Brokers are independent; they typically represent a number of different companies. Agents work for the one company they represent.
  • Brokers can provide you with comparative and competitive information from the different companies with which they deal.
  • Always make sure that your agent or broker is qualified and has the necessary credentials.

Buying Insurance

The total amount of insurance you require may be large when you are younger, have a young family and few assets. As you get older, the need generally declines. Your children will grow up and move away. You’ll have paid off your home and other debts and you’ll have accumulated more assets for retirement. Accumulating sufficient assets, such that insurance may no longer be required, means you could become self-insured.

Tips

  • Generally, buy term insurance for needs that will disappear over a specific term, such as paying off the mortgage or supporting your children. When those needs disappear, the insurance need also disappears.
  • Identify any needs today that are suited for permanent insurance. Are you undecided or on a limited budget? Consider a term policy that allows you to convert it later to a permanent policy.
  • Review your current policies and decisions every three to five years. Make sure that you:
    • Have the right coverage to suit your needs:
      • Review your insurance policies when your economic and personal circumstances change (such as when you marry, get divorced, have children, change jobs, and so on).
    • Are paying a reasonable premium for what you already have:
      • When you’re younger, term insurance is generally cheaper, but the premium will increase as you age.
  • Shop around
    • Request insurance product comparisons; compare premium cost based on coverage and associated riders.
    • Cheaper is not always better: you get what you pay for.
    • Ask questions; buy the type of insurance that meets your needs and is affordable.
    • If money is an issue, don’t walk away. Ask if there is a cheaper solution.
  • Never cancel/replace existing insurance until you’re positive that the new company has accepted and approved your application and the insurance is in place.

Planning Strategy

Don’t solely rely on your group insurance plan through your place of employment. Consider maintaining a separate policy outside work. Your can use your employment group coverage in addition to your personal coverage. Then, if you lose your job, you will still have some life insurance in place.