Having a reliable life insurance policy requires knowing who can provide it. Here is everything to consider when choosing a life insurance company.

Did you know that there are around 1,000 companies that offer life insurance policies in the nation?

No wonder it can be rather overwhelming to really pick the right life insurance company for your needs. The tricky part is that you’ll find that within the amalgam of life insurance companies on the market, there are only a couple of mother companies and the rest are just branches. 

There’s nothing more soothing than knowing that your loved ones will be taken care of financially if you’re gone. If you’re thinking about getting a life insurance policy and merely thinking about picking the right company for your needs fills you with dread, no worries. You’ve come to the right place.

Keep on reading for the full breakdown of all the things you need to consider when it comes to picking the perfect life insurance company for your needs. 

Life Insurance Company 101: Choose the Right Insurance Type

Before you can even take a look at the plethora of companies that offer life insurance policies, you’ll want to nail down the right type of insurance for you.

After all, the price tag of the insurance will be directly tied to the type you select. For example, a whole life insurance policy that works by building cash value will be a bit more complex to acquire than going for term life insurance.

That’s why you need to have a solid understanding of the two main types of life insurance. 

Term Life Policies

When it comes to term life policies, you’ll be getting a minimalistic policy that doesn’t offer any additional benefits, other than the death benefit. 

In short, the insured person has to pass before the beneficiaries can see any of the benefits. 

Moreover, the reason behind using “term” for the policy is that it’s valid for a specific period of time. For instance, you can buy a 20-year term life policy. This means that your insured amount will cover your death for that 20-year period. 

That’s all. Once the term expires, the policy won’t pay anything. 

Whole Life Policies

On the other end of the insurance spectrum, you’ll find whole life policies. Those are all about building cash value as time goes on. 

The premium can either be borrowed against or withdrawn at low interest rates. 

Thus, if you’re looking for a policy that can grant you benefits, you can always pick whole life insurance.

Survey Your Needs

At this point, you’ll want to take stock of your current wants and needs. The key reason behind the existence of all those different insurance plans is because different people need different things. 

For example, if a person is already too old to qualify for a whole-life policy, then they can always choose a term policy. 

The same person can have a whole life policy on the side, but it might not grant enough coverage to fully replace their income. This is especially prevalent for folks who have 10 to 20 years of earning power to go before retirement.

Getting a term life insurance policy can be great for this situation, as it enables a person to get a big lump sum of money left for their loved ones in case they pass away unexpectedly. 

Look at Your Personal Health Data

Before making a decision, you’ll want to have a cohesive (and truthful) understanding of your personal health. 

If you’re older than 30 and you want to get a whole life policy, you’ll find that the majority of insurance companies will be hiking up their prices.  

It’s a simple calculation that the agencies follow: the older you get, the higher the risk of facing a plethora of health issues.

Yet, you need to keep in mind that everyone has a different health history and conditions. Therefore, you’ll want to take some time to weigh your options and check with multiple providers, especially if you’re in optimum health. 

Or you can get the best of both worlds through inclusive policies like split dollar life insurance.

Consider the Different Pricing

Generally speaking, you’ll find that any policy that provides life insurance benefits other than the death benefit will cost a bit more than your traditional bare-bones policy. 

Furthermore, you’ll want to ensure that you’re getting different quotes from a variety of providers.

This way you can have a concrete data set that will allow you to properly compare processes, and get deeper discounts. Especially, if you’re on the lookout for multiple policies, you can always bundle them together and get better rates.

Yet, the tricky thing about life policies is the fact that price isn’t as important as the benefits that you can get. As long as the policy fits your budget. 

The Variety of Offered Benefits

Speaking of benefits, let’s talk about the main reason you’re getting the policy in the first place: the benefits. 

You’ll want to have a comprehensive understanding of all the benefits you’re entitled to via your policy. Therefore, you must prepare yourself to read a lot of fine print.

Pick One With Good Reputation

Admittedly, being in the business for decades means that an insurance company has a host of experience in the field. However, that doesn’t necessarily mean that the oldest companies are the best.

You’ll want to ask around, read online comments, references, and reviews. Also, you can read the financials for the companies, especially the ones that are publicly traded. 

Take your time to review the company’s assets, and see if there might be any financial scandals that are happening behind the scene. 

Ready to Get the Right Life Insurance Policy?

Thinking about mortality isn’t really a happy exercise. However, it’s a fact of life that most of us need to always take into account. 

Hopefully, our guide has shed some light on the key factors you’ll want to consider when you’re picking the right life insurance company for you.

If you liked our article, you can always check out our finance section for additional tips and strategies on how to manage your money and the insurance world.

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