Some key questions to ask your insurance provider BEFORE you purchase your life insurance.
What is guaranteed in the policy and what isn’t? (This should include all aspects of the policy: the premiums you pay, benefits you receive, how and when “riders” apply, and so on).
How long has your prospective insurance representative been in business?
What education and professional accreditation does this individual have?
How long has the insurance company been in business? Is the insurance company financially stable?
Comparing term insurance policies is much easier than comparing permanent policies. But even with term policies, remember to ask what your renewal rates will be 10, 20, and 30 years down the line. What is the difference between the various policies you’re considering?
Comparing permanent insurance policies (PAR or UL) is much more challenging than when comparing term policies, since there are so many variations. Be sure to get an illustration and an in-depth explanation of the “concepts” used by the insurance broker.
“Policy illustrations” can be a minefield. Ask specific questions about the assumptions in the illustrations you’re shown, such as:
- If there is an investment segment to the policy, what rate of return is assumed?
- What if the rate is lower? Higher?
- Is the death benefit guaranteed?
- Will premiums fluctuate? If so, under what circumstances?
- What is the penalty for “early surrender”?
The preceding questions are intended as a guideline only, and are not meant to be exhaustive.