Choosing Life Insurance: The 6 Must-Consider Factors

Last Updated on September 21, 2020 by Andrew Lee

About 1,000 companies offer life insurance policies in the United States, according to the Insurance Information Institute (III). However, the organization also pointed out that many of these are just branches of the same firms. In short, the main, or mother company, takes all their market shares.

Although this number means you have plenty of choices when it comes to life cover providers, this huge selection may also render you confused as to which one to work with. Always remember that not all insurers are the same, especially in terms of pricing, and more importantly, reliability. So to make sure you get pick one most suited to you right off the bat, don’t forget to consider these factors.

1. Licensure

Make sure you narrow your list of prospects only to companies that have the proper licensure. The specific department that regulates these providers depend on which state you live. For example, residents of NJ can contact the State of New Jersey Department of Banking and Insurance, while those in TX have the Texas Department of Insurance to rely on.

Contact the insurance department of your state before you sign any contract. This way, you can rest easy knowing that your provider really puts your money towards your coverage.

2. The offered policies

Almost all insurance sellers offer a wide array of similarly-structured policies. However, they differ not just in price but features as well. So before you start looking, it pays to create a list of what you want to come included in your coverage. This way, you can easily trim your list to those that provide products meeting your needs and preferences.

3. Identity and history

It’s not enough that you read reviews or testimonials you see online about insurance companies. You want to make sure that you’re dealing with a legitimate provider, so research their identity. You should also take a closer look at their history, to find out how they have fared over the years, and if they have received plenty of complaints.

4. Financial security

You’re buying a product that has a long-term impact on your finances, not to mention the involvement of a huge amount of money. Thus, it’s crucial the organization you’ll purchase your life cover from has a solid financial foundation. A good way to verify this is to contact some of the independent rating agencies.

5. History of claims paid

Your policy won’t benefit your loved ones if your insurer won’t pay out. This is why it’s of utmost importance that you thoroughly check the company’s records of paid claims. You can do so through any of the national claims databases online. This will also help you uncover complaints-related information possibly made against the provider you want to work with.

6. Policy value and associated premiums

Under the two basic types of life insurance lie several other subclasses. For instance, term life has two distinctive types, including the level term and the decreasing term. As for whole life, the types include ordinary, universal or adjustable, variable life, and variable-universal.

Some companies may offer all of these, but some may only sell a few. It’s your money, so don’t settle for a policy that doesn’t meet all of your needs just because the first provider you contacted doesn’t offer it. And make sure you also compare premiums, because insurers charge differently even for similar policies

Final Advice

Here’s a last reminder: choose an insurance company that doesn’t hold back when it comes to educating clients, whether potential or existing. The world of life coverage can be pretty confusing, what with all the terminologies and processes, so you want to work with a firm that will guide you throughout the entire selection process. Click on the link to learn how to file a life insurance claim.