If you are an income earner, you must consider getting life insurance. This does not matter if you are young or old. While most young people in their twenties do not consider life insurance, getting it may work out in your favor as policies are cheap at this age.
If you are older, the need may be more pressing, but you must not rush into a policy simply because you feel pressed for time. Taking time to understand what life insurance is and how to negotiate a low rate can save you thousands of dollars in the long run.
Compared to other insurance products, life insurance ranks way up. If you compare it to let us say mortgage protection insurance, someone interested in this policy may only have one major question, what is mortgage protection insurance? On the other hand, life insurance involves a lot more than that.
Here, we give you some pointers on how to negotiate the best life insurance deal.
As with any other purchases, knowing what the market has to offer is the best place to start. Look at competing companies and what they have to offer. Fortunately, these days, it is easy to find a quote calculator that aggregates quotes from multiple insurance companies.
While you are at it, try and understand all the terms related to life insurance and what they mean to you as a policyholder. Print out these quotes and organize them in a folder that you will use later in your hunt for the best deal.
Your next big task will be to find the right agent to deal with. As a rule, avoid agents who only work with one company. If you do choose one, no matter how well you think they have negotiated, they will only give you the best quote for the company they represent.
Go instead for an agent representing multiple underwriters. These agents will frequently have better leverage in negotiating with each company at your request.
Examine the fine print. This tracks back to the first point where you took some time to learn the ins and outs of life insurance. Hidden fees can in some cases inflate your costs by up to 15%.
If you miss this, you will have to pay up because you may have already signed the policy contract. While you cannot escape hidden fees, you can better understand them, and this will help you negotiate them downwards.
Term Life Insurance
Most insurance agents will try to sell you whole life insurance while extolling its merits. While it does have its merits, what it also has is steeper fees and a larger commission for the agent because of how it is structured. Term life insurance, on the other hand, is less complicated. With term life, you have better visibility of the important clauses.
Whole life will also only be paid when you die, which disqualifies you from benefiting from the policy in any way. While both clearly have their advantages and disadvantages, term life will provide you with the lower premiums that will help you save.
Whether you are young or old, understanding that life insurance will never get cheaper over time should spur you to action. Take the initiative and follow these simple steps to find a policy that fits both your needs and your pocket.