Usually, people buy life insurance to alleviate the financial difficulties of abandoned families. Therefore, a careful life insurance business and avoid evil agents should be done. You should be safe from insurance fraud if you understand the needs of life insurance, the types of insurance, and how to find reliable agents and insurance companies.
The essential tips
1. Calculate life insurance needs
Determine how much life insurance is needed. As a general rule, insurance companies recommend a life insurance amount of 10 times the annual salary. Some factors to consider when calculating insurance include:
a. Child Age
b. Number of mortgages
c. Total car loan
d. Amount of debt to family members
e. Is your partner a career
f. Do you need to finance children's education
g. Number of other sources of income and insurance
h. Number of dependent financial needs
i. The number of life insurance that can be purchased
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2. You may need to talk to a trusted insurance agent to discuss what kind of insurance is best for you. Generally, there are five types of insurance: conditional, full, universal, variable, and universal variables.
a. Conditional life insurance provides a guarantee for a certain period of time, usually at the lowest premium price. This policy is a great option if you want limited protection until your child grows up and earns,
b. Full-life insurance provides life insurance as long as premiums are always paid. This insurance is very useful if you want to guarantee the whole life, able to pay the policy is quite expensive, and want to have the option of withdrawal of funds from the policy.
c. Universal insurance is similar to full (lifetime) in terms of warranty period and cash value. A universal policy is the best option if you want full warranty, death warranty benefits, and guaranteed interest amounts, but also have options regarding the frequency and amount of premiums paid.
d. Variable life insurance is related, somehow, with stocks and money markets. It means that the premiums and benefits may have positive or negative impacts (depends on the state of the investment).
e. Universal variable assurances have the universal policy payments flexibility but it doesn’t guarantee the amount of death benefits.
3. Life insurance quote
You can look it up on life insurance sales sites on the internet, use a broker or insurance seller, or buy directly from an insurance company.
4. Choose an insurance company that has established financial strength
In the US, insurance companies are ranked based on financial stability by four independent agencies. These agencies also assess whether insurance is prone or safe.
Recognize life insurance scams
Check if the insurance company really exists. One type of insurance fraud is to create a fictitious company. The insurance seller will grant a policy and take a premium using a company name that is not actually there.
Make sure the company receives your payment. Some insurance agents will withdraw payments but never deposit to insurance companies. This scam already includes theft. If your insurance company does not use direct deposit, keep proof of premium payment and confirm with the life insurance company directly.
Related article : How to Choose Life Insurance
