Buying Insurance – Understand How It Operates

The first “rule” in buying insurance or really anything is to make sure you understand what it is you are buying. You must be educated on the financial instrument but also understand how it operates.

It is easy today to go online and search for life insurance, but you

may be better off choosing an independent agent rather than a company. Go after the word-of-mouth recommendations, and… do not be afraid to ask questions. If an agent arrives via a cold call without a reference from a mutual friend, ask for references, get names of clients who you can contact on how they have fared working with the agent, what kind of job of analysis and planning was done.

Most agents called “underwriters,” may be honest and competent, however they are salesmen. Those who work for one company do posess a special knowledge of and a natural bias for the policies of their own company. You will probably have to rely on an agent’s advice and counsel to a very certain extent, but remember they are no “impartial expert.”

Don’t be pushed, pressured or rushed. Make sure the agent takes the time required to review your unique needs and resources carefully, time enough to work out an best individual solution for your individual insurance needs. Make sure you take the enough to provide all the information needed, as well as time enough to think long and carefully before you sign on the dotted line.

The transaction is not over when you have decided to sign. You should expect your agent to furnish you with a written summary of the plan you and he have worked out for using the insurance proceeds in case anything happens. You should expect him to handle or guide you through any paper work that may be required.

And finally, you and your agent should go over your insurance policies regularly (we do every year) to see what adjustments or additions may have become needed as needs changed.

Hopefully the day will come when you have accumulated enough wealth by hard work and shrewd investing to enable you to begin cutting down on your insurance. That will be a happy day if it comes. But the truth is, even the men who make the big fortunes seldom find it advisable to dispense with their insurance.