by Ruckertax | May 9, 2014 | Frequently Asked Questions, Life Insurance |
TABLE OF CONTENTS How do insurance companies classify individuals for rate purposes? What questions should I ask my life insurance agent? What should I watch out for when buying life insurance? How do I compare the cost of several insurance policies? Do I really need life insurance? How much life insurance should I buy? What type of life insurance should I buy? Should kids have life insurance? How do I balance life insurance with my other investments? HOW DO INSURANCE COMPANIES CLASSIFY INDIVIDUALS FOR RATE PURPOSES? Premiums vary among insurance companies so it’s a good idea to comparison shop in order to get the best premium. It’s also helpful to understand how premiums are calculated by insurers. Here’s a quick look at how this works. Insurance companies place individuals into four risk groups: preferred, standard, substandard, or uninsurable. A terminal illness at the time you apply for insurance will render you uninsurable. Having some type of chronic illness will place you in the substandard category. People with conditions such as diabetes or heart disease can be insured, but will pay higher premiums. If you have a high risk job or hobby, you will be considered substandard, a high risk. The premiums charged will be commensurate with the category you are placed in. Thus, a standard risk will pay an average premium for similarly situated insurers. Tip: One company’s category for you may not be the same as another company’s category, so it still pays to shop for insurance with other companies even though one may have labeled you “substandard.” Tip: Once an insurance company approves you for coverage, you cannot be...
by Ruckertax | May 9, 2014 | Life Insurance |
How much life insurance do you need? What type is appropriate? You should review your life insurance needs each time you have a major life event. Here is what you need to know to properly plan for your life insurance needs-to buy enough and to get the most for your money. Do You Need Life Insurance? How Much Life Insurance Do You Need? Types Of Insurance How Insurance Products Differ How To Shop For Insurance Shopping For A Policy Government and Non-Profit Agencies The prospect of planning for your family’s life insurance needs may seem daunting. The array of confusing products available, coupled with the calculations needed to find the right amount of insurance, would put anyone off. Yet the hard fact is that life insurance is an essential part of your family’s financial well-being. The more you know about it before you go to your agent, the better your coverage will be. If you don’t plan for your life insurance needs, the result could be a waste of thousands of dollars on inappropriate or ineffective life insurance or, worse, financial hardship due to not having enough insurance. We’ve tried to make the process of buying life insurance easier and more informed by providing you with objective, unbiased information and a plan of action. This Financial Guide gives you some basic guidelines about whether and when you should purchase life insurance, and provides you with a system for determining how much you need. It also discusses the types of insurance available, their suitability for various situations, and how to comparison shop for a policy. DO YOU NEED LIFE INSURANCE?...
