At first glance, buying insurance can seem so overwhelming that you may be tempted to skip it altogether. This section clearly defines the different ways to gain coverage and provides you with the best possible purchasing options based on your situation and needs.
Most people buy life insurance through agents or other financial advisors, and for good reason. Buying life insurance can seem so overwhelming that you may be tempted to skip it. Don’t! Here are the different ways to get coverage so you can choose the best option based on your situation and needs.
Determining how much and what kind of insurance to buy is one of the most important financial decisions you’ll make, but it can also be complicated. A qualified insurance professional will conduct a comprehensive financial needs analysis, and walk you through the multitude of questions you need to consider to determine how much and what kind of insurance is right for you, given your budget. And what many people don’t realize is that when you sit down with an agent to discuss life insurance, the consultation is free.
Of course, the quality of advice you get is dependent on how good your agent is. Here are five tips to help you choose the right agent.
- 1. Get referrals
The easiest way to start your search is to get referrals from the people you trust such as friends, family members and other professional advisors you already work with, like lawyers or accountants. You can also try Life Happens’ online agent locator.
- 2. Find out about their specialities
Make sure that the agent you select has the expertise to meet your needs. One insurance agent may specialize in life insurance, another in long-term care insurance. Whatever their specialty, good agents will take the time to listen and ask questions about your objectives, help construct a basic game plan, and work with you to find the right insurance solutions for your needs and budget.
- 3. Inquire about their education and training
If you are not familiar with the letters listed after an agent’s name, ask about them. Professional designations, such as Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), Financial Services Specialist (FSS) and Life Underwriter Training Council Fellow (LUTCF) indicate that the agent has completed advanced training, passed rigorous exams and is serious about professional development.
- 4. Meet face-to-face
Interview at least two agents to establish a basis for comparison in terms of qualifications and character, not just fees. Ask for customer references and check that the agent works with financially sound insurance companies.
- 5. Ask if they hold a professional membership
An agent who is a member of professional associations, such as the National Association of Insurance and Financial Advisors (NAIFA) or the Million Dollar Round Table (MDRT), means they adhere to a stringent code of ethics and are committed to enhancing their skills and knowledge.
At the workplace
Obtaining life insurance through your employer is another option. Many employers provide, at their own expense, a basic life insurance benefit, often equal to one to two times your base salary. While this is a nice benefit to have, insurance experts believe that most people need somewhere in the range of 10 to 20 times their net income and sometimes even more than that.
Check to see if your employer offers you the option to purchase additional coverage through its group plan. Many employers do. To qualify, you may have to answer a few basic questions about your health. It’s important to keep in mind that if you have group coverage and you leave your job, you generally are not able to take the coverage with you.
If your employer does not provide group life insurance coverage, it may make a life insurance benefit available to you on a voluntary, employee-paid basis. While you pay the full cost of the benefits under a voluntary arrangement, there are several advantages to buying insurance this way. Voluntary plans help workers get coverage more easily than if they were to purchase an individual policy on their own outside of the workplace. Premiums are typically paid through an automatic payroll deduction and can be as much as 10% to 20% less because of efficiencies in enrollment and billing procedures. Additionally, you may be eligible for more coverage under a voluntary plan than is offered by a traditional group plan.
Internet, mail and phone
In many ways, the Internet has transformed the way life insurance is bought, as you can get quotes, apply for and even purchase policies with a few clicks. Even still, many sites won’t allow you to buy a policy until you’ve spoken with a qualified insurance professional who can make sure the policy you’ve chosen is exactly what you need. It’s helpful to understand how these sites work.
Some may have contractual relationships with a number of agencies and will negotiate with the company that offers the best product for your specific needs, much like a brokerage agency. Other sites function like marketplaces, promoting the products of a large number of companies by using the data you enter to link you with a company that has a relevant product match for you.
When you buy online, by mail or by phone, it’s generally your responsibility to figure out which product best fits your needs, so it never hurts to follow up with an agent in your community who can asses whether the rates are fair and the policy is a good match. Even if you ultimately buy online, you’ll have peace of mind knowing that you’ve covered all your bases.
Find a Company
There are more than a thousand companies that offer various types of insurance products, so finding the right one can be a bit overwhelming. Let us help. Look through our Tips for Choosing a Company page to help you understand the ins and outs. You may want to consider going with one of the hundred-plus companies that help support the nonprofit Life Happens, and that share our commitment to ensure you have the knowledge you need to make informed insurance-buying decisions.question What's next? Find an agent. Click here to use our Agent Locator to find an insurance professional near you.