New Study Reveals, 100% of People Will Die…Someday!

Okay, so there really is no new study, but since this is Life Insurance Awareness Month, I thought I would talk to you about something that most people do not like to discuss…Life Insurance.

Life insurance is something that no one likes to think about. All the same, 93 percent of Americans believe that life insurance is something most people need, and most of us have some. That’s the good news. The bad news is that most Americans don’t have enough. Nearly 26 million adult Americans have no life insurance at all, and those who are insured have coverage equal to just four times their annual income, about $176,000.

Many people get confused about life insurance; how much coverage should you have, which type of coverage should I own; whole life, term or universal life? My answer to these questions is this, “just get some life insurance that will keep your family in the lifestyle they are used to now in case you die and buy some coverage that you can afford.”

The following are a few tips about buying life insurance that I have put together over the 15 years of advising people on how to find the right policy at the right price.  Of course if you would like to speak to me about my ‘secret formula’ for finding the right amount of coverage for you that will protect your family, just call me at: 914-633-1717. I can get you a quote from over 100 insurance companies in less than 5 minutes and you’ll get an agent who cares, not some internet company that you’ll never hear from again.

Tip# 1: Don’t spend too much time on a life insurance quote.

Don’t be fooled by the low price quotes that you get online – They don’t apply to you unless you are extremely healthy. Statistically, only 10% of the people who apply actually get the lowest priced policies. The premium has nothing to do with the initial quote you get online or from an insurance agent. It’s amazing to see how many people get tricked by an agent who quotes company X at a lower price than another agent.

Life insurance policies are the same no matter who you buy them from, whether it is from an agent or a Website. Prices are based on your age and your health. If someone tells you that you can “cut out the middleman” they’re not telling you the truth. Anyone who sells an insurance policy must be licensed by their State Insurance Department. So you cannot cut out the middleman no matter what the Website, Television or Radio ad says. They are all insurance agents in disguise.

Tip# 2: Ignore the hype on term verses cash value.

You can go crazy reading what everyone one has to say about buying term insurance or whole life insurance. Most insurance agents want you to buy whole life insurance because they make more money on a whole life sale than they do on a term insurance sale. Many consumers fall for the trap of buying whole life as an investment also. Most whole life policies are not investments. Whole life is merely a way to have life insurance for an infinite period during your lifetime as long as you pay your premiums and can it never be cancelled. (Certain types of whole life policies can be terrific investments. Call me and I’ll tell you how.)

Here’s the rule of thumb when you are considering buying whole life or term insurance:
Buy enough term insurance for short term needs; cover your mortgage, the kid’s education needs and your household living expenses should you die prematurely.  Additionally, buy some whole life insurance too if you can afford it. You will have some coverage later in life to cover unforeseen medical, burial expenses and liquid cash flow for your surviving spouse.

Tip# 3: Avoid Group life insurance Plans.

A BIG, BIG mistake that too many people make is that they rely on their employer to provide life insurance for them. Many people will change their jobs many times during their working careers and each job change results in different group insurance plans. Not to mention that your current employer can cancel your group life insurance program at any time and leave you and your co-workers without coverage.

Smart planning includes having your own personal life insurance plan. If you are healthy you will probably pay less for your own policy than your group policy and here’s why: Group insurance rates are based on factors that include all the employees that work at your firm. Some are healthy, some are not so healthy. The insurance company knows this and will charge rates that are much higher than if you just bought your own policy. If that’s not bad enough, group insurance rates increase in 5 year increments. So if you are 35 and think your rates are reasonable right now, they won’t be when you turn 45, 50 or even 60! Group rates just keep going up and up as you get older.

Tip# 4: Avoid Captive Insurance Agents.

Look for a life insurance agent that is independent. This should be someone who works for at least 10-20 companies. Ask the agent for a quote comparing several companies side by side so you can make the best choice. Captive agents can’t provide this analysis because they only represent one company. And they will try to convince you that their company is the best and only choice for you. Stay away from these agents. They are a dying breed.

Tip# 5: Buy more insurance for tomorrow than you need for today.

Too many people look at their current life insurance needs in a “capsule” of what they need today. They do not consider that their insurance needs will change as they get older. They might have more children, move to a bigger home, get a bigger mortgage and need more coverage. These life changes happen all the time with just about every one of our clients. So, picture how your life might be a few years from now and buy a little more insurance than you need today.

If you would like a free quote or consultation, feel free to call us at: 914-633-1717