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Understand the need
When investigating term insurance to buy understand why it is
needed, for how long and does the need change over time. Taking
the time will save premium dollars and this could be in the thousands
over time. Quality time spend with a qualified advisor assessing
the need is important so go through a financial needs analysis
to get a solid direction. This means personal detailed information
such as income, dates of birth of all involved, knowledge of assets,
liabilities, insurance in force, length of dependency period,
education needs, final expense needs, income need after any dependants
have left home, personal interests, potential inheritances, and
any documentation regarding government benefits such as CPP is
suggested to be made available. There is a lot to it most times
but other times it is a simply as covering a specific debt.
Buy the product that fits the need
Once you understand the need then buy the product or products
that best fit the need. This will save money and as an example
for a young family to analyze the need and then to forecast the
future need you will learn that as the children get older the
dependency period decreases which often results in less life insurance
being required. Term insurance covers a specific period of time,
10 years, 15 years, 20 years, to age 65 and so on, and when the
term ends normally the product will renew. This usually is a negative
event as the premium will most likely go through the roof. Be
the boss of your term insurance and do not let it control you.
Beware of preferred underwriting
Preferred underwriting is the buzz term of the decade and can
be rewarding but on the other hand it can be very confusing if
not explained or understood at onset. In some instances it can
be compared to the bionic man rate, next the superman rate, then
the good health rate, next the standard rate or sometimes the
substandard rate that is substantially more than the best rate.
Medical underwriting will determine which rate you qualify for
and more times than not it is bad or disturbing news. This can
be avoided by spending the appropriate time with your qualified
Wise Financial Group Inc. representative. Sometimes one submits
applications to various companies to obtain the best rate possible
and we can assist in this regard.
Look at the options
The options are many and sometimes complex but it is worth knowing
what options are available as some are very economical. Waiver
of premium is cheap in cost but can protect a disabled person
from losing their life insurance policy because they cannot afford
the premium. Accidental death and dismemberment is a common option
and sometimes a child life rider is an option. Some companies
hardly have any options, whereas others have plenty. Look to your
advisor for advice as to how to best address your needs between
the many possibilities that exist. Conversions are included in
most policies and these normally give one the option to convert
to a longer-term contract like permanent insurance, but there
are limitations usually to a specified age. Giving your advisor
a budget once you have a ballpark is a good approach to designing
a package.
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