Your Life Insurance Policy – Some Safeguards
Buyer beware sounds trite but you should keep it in mind when you go shopping for a life insurance policy. Your goal should be to ensure that the information you receive is a fair and honest representation of the facts as they apply to your situation.
The first thing you should consider is the qualifications of the agent you plan to work with when you buy your life insurance policy. If they use any initials after their name, find out what they mean. It usually indicates some advanced training. Since the insurance industry is regulated in most jurisdictions agents must be licensed. Licensing can involve basic training, passing an exam, annual renewal of the license and completion of a specific number of hours of ongoing education. This ensures that the agent stays up to date with the industry and usually provides a system to deal with complaints.
Ask if the agent represents only one insurance company or if they represent products from multiple companies. Find out how the agent is paid, too. You don't want to end up buying a life insurance policy mainly because it pays the agent the best commission!
To find an agent that is right for you it is sometimes helpful to get recommendations from people you trust. In the final analysis, it really depends on whether or not you feel comfortable with this person. The second area you will want to check is the insurance company that offers the policy that you are considering. You will want to feel confident that the company you choose will deal with your claim in a fair and timely way. You want to know if they are financially sound and what they are like to deal with when you have a claim. This is probably information that your agent can provide. However, if you want to do your own checking, there are private companies that rate and grade individual insurance companies. A.M. Best Company, Fitch Investor's Service, Moody's Investor Service and Standard and Poor's are all reputable firms that can provide this service. Each one will have its own standards so be sure you understand how they arrive at their ratings. One final issue related to to the safety of your life insurance policy is the actual physical safety of the policy. A life insurance policy is a contract between a you and a life insurance provider. It is an important financial document that you should keep in a safe place. A safe deposit box at your bank is a good choice. Let someone know where you keep your will, life insurance policy and other important documents so that when you die it is easy for the beneficiaries to locate the policy and make a claim. There are ways to track down whether or not someone has a life insurance policy but it can be a complex task at a time that your loved ones are stressed. Some advanced planning on your part can ease the process.
| 