subject: Life Insurance Plan [print this page] Life Insurance is the only assurance that you have to guard you and your loved ones against the unknown and the unforeseen. Insurance is essentially a pact between the insured and the insurer. The insured pays the insurer a certain amount of money at fixed intervals as a premium in lieu of which, the insurer pays a certain sum assured in the event of death or on maturity of the policy.
Below are the steps which tell how to plan your life insurance policy. . . .
First decide how much insurance to buy.
You should decide how much life insurance you need. You need to look carefully at your individual circumstances. The real value of life insurance is to protect your loved ones after your death. Before you buy, ask yourself:
What costs and hardships will my family have to deal with after I am gone?
How will the loss of my salary affect my family?
These questions require careful thought and perhaps a candid talk with your beneficiaries.
How to buy life insurance
Mail order
A few insurance companies sell through the mail. You mail a completed application directly to the company. The company usually does not have an agent in your hometown.
The Internet
A growing number of insurance companies are expanding their marketing and are starting to sell policies on the Web. All state laws and regulations regarding selling insurance apply to the Internet and insurance-based Web sites. Do your research and make sure the company is authorized to do business.
Agents and brokers
Most people buy life insurance through an agent or broker. Agents and brokers operate differently.
Agents represent one or more companies. The agents job, which is commission based, is to sell you the policies of the company he or she represents.
Brokers represent and work for you. Typically, you describe to the broker the type of coverage you want and the amount you want to spend. The broker surveys the market and brings back options for you to review. Brokers also receive a commission on the sales they arrange.
Choose your agent or broker carefully. It is wise to select someone who is an established business person in your community. You may wish to ask, What makes you feel you are qualified to talk to me about my financial security? Reliable salespeople should not mind verifying their credentials or listing their qualifications.
What you should know about your insurance company
Different companies offer different products. Some companies work with agents you can find in the phone book. Other companies prefer to deal directly with you.
One other key item you should think about before you buy is the financial security of the insurance company. As with most businesses, the security of a company depends on how it is managed, supervised, and controlled. One way to find out about your insurance company is to check its security rating. Several independent rating organizations monitor the financial strength of insurance companies
With the increasing life expectancy, it makes sense to make ample provision to live life with a certain degree of comfort. No one has seen tomorrow but we have the power of now. Save and invest today and rest assured tomorrow!
