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Life and Health


By September 1, 2010No Comments

When you are considering Homeowners or Auto insurance, you probably count on your insurance agent to assist you in understanding the many options available. For instance, what deductible should you choose? Should you pay for emergency road service or not? Should your teenager have his or her own policy? How much coverage do you need? You value this relationship, but you are wondering if you might get a better deal on your Life insurance if you buy direct and cut out the middleman.

Although it is possible that you might attain a better price, it is also likely that you might not. More importantly, you might get what appears on the surface to be a better deal, but on closer examination is not as good as you originally thought.

If you call a Life insurance company and apply over the telephone for the Life insurance they quote you, you might be in for several surprises, either now or later.

First, cutting out your insurance professional does not always result in a lower Life insurance premium. It does, however, mean that you will have to depend on an 800 number and the person answering the phone. As with any telemarketing organization, there is often high turnover in these positions, so you might never develop a relationship you can rely on.

Second, you should be warned that all “comparable” policies are not created equal. Although insurance plans might appear the same on the surface, when you examine the details, there could be extensive differences. The period where the premium stays the same (for Term Life) might vary; the guaranteed and current interest rates might vary (for Universal Life); the investment options might not meet your needs (for Variable Life); and the interest/dividend crediting might not be what you think (for Whole Life). There are many riders, options, and other features that can make one plan more suited to your needs. Unless you know about these options and can tell the voice at the other end of the phone exactly what you need and want, you might end up with the wrong insurance policy altogether.

Third, your trusted insurance professional knows you and understands your needs. Someone you have never talked to before might not know about your disabled daughter, your planned pregnancy, or your need for spousal insurance. If they don’t know you, how will they know to ask about these things? An advisor who knows you and your family is in a much better position to make sure you obtain both the right type and right amount of Life insurance. They can also decrease the likelihood that you are surprised, after underwriting, with a much higher premium than you were originally quoted.

Fourth, you might have existing Life insurance that can be adapted to meet your current needs. This reduces or avoids underwriting and might save lots of money in new premiums.

Your financial situation is complex as well as ever-changing. Working with a professional who knows you and can meet with you face-to-face can help you avoid problems, and might help prevent costly mistakes when you are buying Life insurance.