Term Life Insurance should be banned from being sold over the
telephone, or with a mail in application, or through a
television commercial.
Millions of Americans buy their car insurance exclusively
one-way. The Cheap Way. Does it Pay for you to purchase your
life insurance the same way? Buying term life insurance is NOT
an item you should buy on a price quote. Why do you want to get
the lowest price?. You could think, “I will be six feet under,
and I will not know if you did the best thing for your loved
ones.” That is, unless you give this article some consideration.
I am advisor working with insurance companies and marketers, I
write articles, and do not make a dime off of insurance sales.
However, after 35 years, I am able to see the grass on both
sides of the fence.
For cheap term insurance buyers, they are told the policy has to
be good, it is so highly rated…. LOOK OUT. One of the largest
term life insurance companies, with a great rating, suddenly
needs Federal Government Bailout. This used to be the 2nd
highest rated company in terms of insurance being sold by
thousands and thousands of semi-independent sales agents and
insurance brokers. Now this same company keeps using taxpayer
money for buying very expensive television advertising. They
show low term life insurance quotes, wanting you to buy direct
from them.
Here is the real shame! Right while the Federal Government
bailout is beingperformed, television ads are appearing. They
are promoting this financially trouble company’s cheap term
insurance rate quotes. The insurance company and some of the few
agents still selling the product are “buying business”, saying
you can save up to 75% over their competitors. Buying business
refers to offering your product at a lower rate than your
competitors, so that you will get more of it. Is there concern
involved on the ability to pay out death claims? If there was,
a taxpayer paid, government bailout would be likely not have
happened. You be the judge.
Approach an independent insurance broker, representing 6 or more
companies offering term life insurance. There are a few factors
that determine which one he offers you. A lot of this depends on
honesty of the broker. His commission could range from 50% to
90%. The term policies financial ratings will differ by rating
firm, but as pointed out in the case above, ratings are not
solvency guarantees. The cheap term insurance policies could end
up costing the most 10 years from now, when you are no longer
insurable. Is this a level term policy, a level premium term
policy with decreasing benefits, or a yearly decreasing term
insurance policy?
Term insurance policies can also contain some trick riders. It
could have a spouse or child rider that expires at a certain
time. Or the rider might have to be converted to much higher
premium whole life insurance. There may be accidental death
add-ons, these may are more profitable
to an insurance company than trinkets are
to a circus hawker.
At some point, $1,000,000 of what started as cheap life
insurance is going to be too expensive to maintain. Have a
knowledgeable agent explain now what your options are. Chances
are that in 7 years either the life insurance company is under
new ownership and internal procedures have changed, or the
insurance company was bought out, or it became insolvent. Also
the chance of ever seeing the same agent again is very unlikely.
(due to extreme insurance sales agent turnover).
Advice is free.
There is a difference between low, reasonable rates and cheap
term life insurance rates. Get good advice from an insurance
sales agent with over
four years experience that you feel you can trust.
