1. Be careful when changing your insurance. Many unscrupulous brokers encourage applicants to replace existing life insurance policies, simply to pad their wallets. Changing them often does make sense, as term expenses have lowered across the board in recent years. Before stopping whole or universal life plans make sure you look at the small print of your policy documents. Some of these plans can cost you massive amounts for surrendering them early as they are locked into favourable rates.
2. Standard life insurance schemes usually have smaller premiums and bigger face amounts than the non-medical life insurance policies. For the first two years of a death benefit plan the return is often limited to return of amounts paid and the interest. If you have major health issues then these types of schemes can be the best type to purchase.
3. The unsuspecting consumer can easily be led into buying accidental death policies. Accidental death accounts for less than 3% of insurance claims so they may be a good money maker to the insurance company, but not to the consumer. The same term policy is often less expensive than any of the accidental death schemes for sale.
4. Watch out for captive agents. A captive agent is only allowed to sell his / her own company's goods. Companies employing independent brokers often charge less expensive charges than companies employing captive agents. The next problem with captive agents is that they are unable to look around for the best product for your lifestyle and the best value for you.
5. Charges involved with the initial premiums can be off putting, but when looking at your life insurance premiums, total up the complete cost instead. A marketing ploy used by lots of insurance companies is low initial premiums. Policies that start with reduced initial premiums which increase with age are probably better for those consumers who only need temporary insurance. The problem is many brokers employ a one-size-fits-all philosophy. The brokers do not take enough time to look at why you are looking for insurance or how long you'll want it.
6. Be conscious of policy exclusions. With exception life insurance contracts have a two-year suicide exclusion. But many contracts also carry certain travel or recreational activity exclusions if the client was engaged in these activities at the time of application. Each insurance organization has its own underwriting guidelines, so the best defense is to choose a broker who works with multiple carriers and is up to date on the different underwriting protocols.
Although the insurance companies 7. can not contest the information you put on your documents, Usually after two years (standard Incontestability period of life insurance products ), it will not stop them Pursuing criminal charges you on the if you lie or avoid filling in the application correctly. Not telling the truth or concealing information can be disputed by an insurance organization if you try to make a claim in this time period.