Today I want to talk about the importance of comparing life insurance policies.
If you decide that you know you need life insurance, whether that be term life, whole life, equity index, variable life, all the different types of life insurance policies that exist; it’s important to compare so you understand the benefits, pros and cons of which policy is going to be best for you.
Let’s take a look at some of the variables that you should consider when comparing life insurance policies.
Comparing Life Insurance Companies
It’s pretty easy to make the case that term life is going to make a lot of sense in a lot of different situations, but even if you decide that term life is the way to go, you want to not just compare the type of insurance but also the carrier. When it comes down to the carrier you are going to want to make sure the carrier has a high rating and high standard like A.M. Best where that life insurance company is going to be there 10, 15, 30 years from now to pay out. Heaven forbid, you took out a term policy and didn’t compare the insurance company to find out if something happened to you, and the insurance company wasn’t solvent and could not pay your death benefit; how horrible would that be for your family.
Don’t Forget to Compare the Cost!
It’s important to compare the best rated life insurance companies, and with comparing those companies you should also be able to compare the cost. In some instances, I have seen where people didn’t compare the term policy. They had an agent who was supposed to be an independent agent and that person ran them a quote. They paid it because that is what they thought was in their best interest. Then, whenever we actually ran a quote and compared that to some other insurance companies, it turns out that they could have saved a pretty penny had they checked into it.
This is actually something that, I don’t want to say fell victim to, but when I first started in the business I took out one term policy for myself and went through one company. A second term policy I got for myself and went through another company, and I ended up taking out a third policy and went through an entirely different company and really thought that I was fine. I thought I was paying the best rate. I didn’t feel like I needed to compare and shop rates.
Never Hurts to Double Check
Then, probably a year ago I decided you know what, I’m going to check and compare my rate to make sure that I’m paying the best and cheapest amount. Turns out that I could have saved and actually am now saving $400 a year and was also able to get $250,000 more coverage all because I took five minutes to compare how much I was paying with my other policies compared to getting a new one with Banner Life. $400 for five minutes works out to $4800 an hour. That is a pretty good return on investment.
These are just some of the few reasons why it’s super important to make sure you compare to find the right type that’s best for you, make sure you’re getting an insurance carrier with solid ratings and that is going to be able to take care of your family if something happens to you, and most importantly comparing to make sure you’re paying the best and cheapest rate for the term life policy that you need.
Working with an Independent Insurance Agent
Earlier, I told you that I’m always running into people who supposedly worked with an independent agent, but they still didn’t get the best life insurance rates. While these people ended up paying more for life insurance because of bad agents, doesn’t mean that you have to.
When you partner with an independent agent, you’re actually working with more than 50 companies at once. Not every company is the same. Each of them are going to offer you different premiums for your life insurance.
The best way to find the perfect plan is to compare companies and policies side-by-side. You can spend time making your own spreadsheets and calling agents, or you can give us a quick phone call. You can decide which one is easier.
How Much Life Insurance Do You Need?
Before you can start comparing companies, you have to do some groundwork. One of the first things to do is figure out your family’s life insurance needs. Each household is different. A $500,000 which works for one family won’t necessarily work for another family of the same size.
How do you know how much life insurance your family needs? It’s easy.
First, add up your major debts. This includes mortgage, credit card bills, student loans, etc. When you have the sum, then you need to add in your annual income. Your life insurance should pay off bills and replace your salary. Those are the two main goals.
You should also consider any future expenses that your family will run into. There are some bills that you know your family will have to pay, like college tuition for your children. Once they go off to college, and if you weren’t around, it would be difficult to pay for those expenses. Your life insurance policy can give them the money that they need to further their education and not take on any additional debt. Spend some time looking into your crystal ball and thinking of any major bills that they may run into.
Comparing Life Insurance
We know that getting life insurance can be long and overwhelming, but we can make it easier. Our agents can help you get the best policy without having to spend days researching companies.
If you’ve had your current life insurance plan for more than 5 years, you can always compare other plans to see if you can save money. Simply spending a few minutes using our quote tool could save you hundreds of dollars. It saved me $400 a year, just imagine that extra money in your pockets.
Not only can our agents help you compare the rates of dozens of different plans, but they can also help you compare the benefits of the various types of life insurance policies. There are several different types, whole life, term, no medical exam, and many more. All of them have their various benefits and drawbacks that you’ll need to look at in light of your situation. Every person is different, and every family is going to have different life insurance needs.