Life Insurance 101: What You Should Know Before You Buy

TIP! A part of the reason why insurance companies are charging you a lot for life insurance could be because you participate in dangerous hobbies such as skydiving or bungee jumping. In addition, many companies charge higher premiums for occupations that involve increased risk.

It is important when buying life insurance to know what you’re getting into first. You should start by finding out which resources you can use and who can answer your questions. The following article is an excellent resource for you to begin with.

TIP! Get your life insurance policy through a financial adviser rather than a broker. If a broker convinces you to take out a life insurance policy, he or she will earn commission.

Although term life insurance may seem like an affordable and easy way out, it is also very temporary. The main selling point for this kind of insurance is the fact that it is inexpensive. Traditional life insurance policies are financial investments that are permanent. They even give you the ability to borrow against them if needed. Term life coverage expires after a set period of time and you then have to renegotiate a new policy.

TIP! If you engage in work and sports that are dangerous, your life insurance rate will be higher. If you feel your life insurance rates are too expensive, think about quitting bungee jumping, scuba diving, or skydiving.

Before committing to a life insurance policy, you should take time to do some comparison shopping. The price differences between companies can vary widely, as much as 50%. Check the coverage prices online at comparison websites as well as the insurance companies’ official sites. Also, make sure that the quotes you compare take into consideration your medical history.

TIP! Whenever you submit data online in connection with a potential purchase of life insurance, be sure to limit the type of data you reveal. Plenty of con artists pretend to offer life insurance, but are really just fishing for information to use for identity theft.

If you like to live on the wild side by bungee jumping, scuba diving or skydiving, then this may cause your life insurance premiums to increase. There are certain occupations that may be charged a higher rate simply due to the risk factor of the job. An example of these types of occupations could be a race car operator, or even a helicopter pilot.

TIP! Once you obtain life insurance, it is important to inform those who may be affected about it. Make sure that your beneficiary has all the necessary information, such as where the documents are located and the sum insured.

You do not have to purchase your life insurance policy with a big pay out. This will be unnecessarily hard on your finances while you are still alive. Instead, get the coverage you need to just pay your final expenses and major bills at your death.

TIP! Prices can vary significantly from company to company. Some research has shown that price discrepancy can be as high as 40 percent.

Careers considered to be dangerous will cause the cost of life insurance to go up. Consider whether the enjoyment you get from high-risk activities such as skydiving is worth the higher life insurance premium rate. Also, traveling to dangerous parts of the world could exclude you from certain discounts.

TIP! Take measures to avoid paying commissions or extra fees for your life insurance. The commission goes to an insurance broker and then you have to pay that cost in premiums.

If you fill out a form online for quotes on life insurance, be careful about offering up your personal information. Lots of scammers are out there who claim to provide excellent life insurance, but they really are wanting to steal your information. For just a simple quote, you should never need to give more than your home zip code.

TIP! When shopping for insurance, make sure that the agent that you talk to is above board, and that they don’t make any wild claims. Insurance companies are rated by independent companies.

Take advantage of the Internet when shopping around for life insurance. There are a variety of sites that will let you compare both the prices and ratings of various companies. Be sure to visit some of these! There are three excellent websites that you can use: Accuquote, Insweb and Insure.com.

Independent Broker

TIP! Don’t cash out your policy except in extreme necessity. Many people decide to cash their policy because they go through a hard financial situation.

When shopping for life insurance, it is a good idea to consult an independent broker rather than a firm. An independent broker can provide an extensive array of insurance options and products from a variety of sources. On the other hand, agents at a larger firm rarely offer options outside of their own products. As life insurance will be a policy you want to retain for some time, do some shopping around before you make your choice.

TIP! The questions you ask should be pertinent and very detailed. If your agent cannot answer these questions in full confidence, you need to find someone who can.

As you have seen in the above tips, there is a lot of knowledge you can acquire before choosing and purchasing a life insurance policy and it’s this knowledge that can help you with your future. Do everything you must to find out what policy is best for your needs.