In a time where the Internet allows us to compare prices on almost anything we buy, I am surprised by the number of smart people that I see overpaying for their life insurance. (Advisors are guilty of this, too!)
Usually, the main reason a person is overpaying is that they didn’t know how to properly research and compare life insurance products. Many times, a person buys the first product they see in a misguided attempt to simplify the process.
If you are in the market to buy life insurance, if you recommend life insurance to your clients, or if you can’t remember what type of life insurance you bought or why, this article is for you!
5 Tips to Ensure that You and Your Clients are Finding the Best Rates on Life Insurance
Work with an independent insurance broker. A broker that represents multiple insurance companies has loyalty to you and can help you compare different insurance companies’ products. An agent that works for one particular company has loyalty to their employer and is expected to give preference to that company’s products. Don’t go online or try to contact individual companies – a good broker will know which companies to approach and that will save you time and energy.
Always ask to see at least two products. For example, when buying term life insurance, compare 20 year term and 30 year term quotes. When buying permanent insurance, compare at least two of the four types (whole life, universal life, indexed life and variable life). Each product has strengths and weaknesses – make sure you understand the differences.
Get quotes from at least three different insurance companies. Prices vary significantly. For example, in New York the price of term insurance can be double the price from one company to the next.
Work with a team. Engage the help of your estate planning attorney, wealth advisor and accountant. They can help you determine your budget, whether or not you need a trust, and how state and federal estate taxes are likely to affect you.
Review regularly. Have a broker review your policies every year or two, or when you experience a life-changing event. Your family, finances and goals will change over time, and so will your life insurance needs. Also, insurance companies constantly come out with new products, and sometimes it makes sense to switch.
Please share these tips with your colleagues and friends.
For more information on purchasing life insurance or for a complimentary review of your existing life insurance, please contact me at 646-801-9983 or erin@dynamainsurance.com.
