The internet is a great resource for researching
and comparison shopping. It is a quick and convenient
way to see what is available and how much it will cost.
Another tool for comparison shopping is a company's
sales illustration.
Sales Illustrations
Most states have adopted regulations
developed by the
National Association of Insurance
Commissioners (NAIC)
that help show the consumer
more realistic values when
shopping for any type of life
policy. Ask your sales representative
if the company’s products comply
with this standard.
Then, when looking at the sales
illustrations for various policies,
look at the common items
across all companies.
The sales illustration will
describe the policy and the
additional benefits available.
They are future projections
and usually include both
guaranteed and nonguaranteed
elements. The nonguaranteed
elements are based on the
company’s assumptions — not
guarantees — on future mortality
experience, investment
experience and their expenses.
It will show what you can expect
to pay in premiums, the buildup
of cash values and cash surrender
values and how the death
benefit may change with
a particular policy.
Some policy illustrations used during
sales presentations can be misleading.
Some insurers may give higher
cash values than you would
get from similar policies with
similar premiums. Those companies
may be using unrealistic
assumptions (such as future
interest rates). You need to ask
that the values illustrated show
the policy’s guaranteed values,
as well as assumed values.
Other Things To Consider
In addition to comparing premiums,
index values and policy
illustrations, there are other considerations
before making a purchase.
- The policy’s past performance
and its interest rate history. Research a
company’s past performance
as compared to its illustrations
and its competitors.
- Special features. If there are
additional policy features, are
they suited to your needs? Or would you be paying for
features you do not need?
-
The company’s rating by
the different rating services.
A.M. Best Company,
Moody’s Investors Service
and Standard & Poor’s
Insurance Ratings Services
are independent agencies
which evaluate the financial
strength of an insurance
company. Buy from a company
with strong ratings
for financial stability.
- Risk classes. There is a
growing trend in the insurance
industry toward multiple
risk classes. This generally means
lower premiums for those
who meet the most stringent
criteria and higher premiums
for those who do not.
-
Service. Make sure that
the company you buy from has a good reputation for
service following the sale.
Reviewing Your Coverage
It is wise to review your life insurance coverage
annually to ensure you are properly insured. Major life
events, such as marriage or divorce, birth of a
child, job promotion or purchase of a new home or
real estate can significantly impact your life insurance
needs.
If you need help evaluating your situation, talk with someone who
has established industry credentials or professional
designations such as a Chartered Life UnderwriterTM, Chartered
Financial ConsultantTM, Life Underwriter Training Council
FellowTM or a CERTIFIED FINANCIAL PLANNERTM practitioner.
They can review your current coverage and determine
if you need to make any adjustments.
It is also
important you have the correct amount of life
insurance. By not having enough
coverage, your are putting your family at risk
financially. By having too much, you are spending
more money than you need to on premiums. The bottom line is making sure you are properly insured so your loved
ones have the protection they need.
|
Auto
Insurance
Auto
Insurance