Life insurance FAQ
Buying life insurance is certainly a very wise decision to come up with. Yet, the effectiveness of life insurance depends on the choices you make when shopping for this type of insurance. If you are new to the whole concept of life insurance learning more about it is a must for you. You can ask your insurance agent or the insurance company about the basic aspects of life insurance and here are some of the most important questions to consider:
Q: What is the right amount of coverage to purchase?
A: the amount of coverage to be included into the policy is linked to your annual income and the overall family budget, as well as the amount of any financial responsibilities that you have. The main idea is to replace your income in its entirety for a specific period of time you feel is necessary.
Q: How can I learn about the discounts I can opt for?
A: Always consult with your agent about any possible discounts. You can also ask the insurance company directly whether they can offer you any discounts.
Q: Should I renew the policy with the same company when the term expires?
A: Sometimes by staying with the same provider and prolonging your life insurance policy will give you some good discounts. Yet it all depends on a particular provider. So make sure to learn whether this applies to your policy before the due date. Otherwise it may be better to switch to another provider.
Q: Are there any particular discounts that can be overlooked?
A: People who are buying life insurance often forget to mention if they are veterans or university alumni. These groups of customers usually get special offers from most companies providing life insurance.
Q: Should I review my policy on a regular basis?
A: It is recommended that you review your policy with the insurance agent at least every year. If there are any serious changes in your life such as marriage, birth of children, moving to another house or similar you should review your policy and introduce necessary adjustments to it right after such events.
Q: Is there any sense in shopping around?
A: Of course! By doing some comparison shopping you will be able to locate the most competitive offers from different providers. It's the most effective way to find a policy that will provide the best coverage for the most affordable price.
Q: Will my credit rating affect life insurance rates?
A: A growing number of life insurance providers have started using credit ratings for determining the rates. So if your rating isn't that good consider reviewing your credit report and taking measures to improve the score. Otherwise you may be charged with higher rates.