1.
Start with a practical evaluation of your family’s financial
needs for the immediate and ongoing future in the event of
your death. Immediate needs typically include: funeral costs, medical
bills, an emergency fund and other expenses. Other expenses can include:
taxes, mortgage payment, and education expenses.
2. Once your needs have been calculated, consider the source
of income that will be lost in the event of your death. Most
advisors recommend an insurance policy between 5 to 10 times your
annual salary.
3. Determine if there is a loss between the money your family
will need and what will be available to them. Life insurance,
can help make up this difference.
How do I pick an insurance company?
There are hundreds of life insurance companies and thousands of agents
to choose from. Here are four main considerations you should use:
Insurer's stability
In
addition to a reasonable price, you want to be confident that the
insurance company will be in good health financially to pay your claim
if necessary.
Companies that rate insurer’s
financial stability include:
A.M.
Best
www.ambest.com
Moody’s
Investors Services
www.moodys.com
Standard
& Poor’s Insurance Ratings Service
www.standardandpoor.com
Weiss
Research
www.weissratings.com
Service
The
insurer you select should offer excellent service. The agent or company
representative you deal with should explain options to you in a way
you can understand so you can make the best choice for your needs.
If you have a claim or question, the company should handle it promptly
and accurately. Your state insurance department will be able to tell
you if the insurance company you are planning to do business with
has any consumer complaints about its service.
Comfort
You
should be comfortable with your insurance purchase. Your agent or
company representative should answer all questions to your satisfaction
before you buy any policy.
Price
Premiums
vary widely between different companies, depending on their expenses,
investment experience and underwriting standards. Compare prices from
at least three companies before buying to make sure you are getting
the best value for your insurance dollar. When you compare prices,
make sure you compare similar insurance plans, based on your age,
the kind of policy and the amount of insurance you are purchasing.
Prices may differ between companies because of different features
or different levels of service quality or the financial strength of
the insurance company.
Content provided by Insurance Information Institute
(III).
