Buying Life Insurance

Back to first Five Things

Thing No. 6  

Check the rating.

Make sure the insurance company has an A+ rating @ standardandpoors.com.

Thing No. 7  

You'll have to “get physical.

Ever see those cheesy commercials telling the old folks that they are guaranteed coverage and they don't have to take an exam? The way they do this is by charging a high premium for a death benefit that is low.  (That's why they talk about the high costs of funerals in these ads because that's pretty much what they're going to cover.)  Most of their customers pay more in premiums in just a few years than their beneficiaries will receive, ever.  Pretty sad considering they could have just put that money in a savings account and been better off.  If you're in decent health, don't go for a “guaranteed issue” policy and do submit yourself to the indignity of the physical and the merciless judgment of your lifestyle that will ensue.

Thing No. 8  

Clean up your act.

They're going to scrutinize you for nicotine, drugs, blood pressure and weight.  And, they're going to hold it all against you in the form of your premium.  If you're going to get life insurance tomorrow, there isn't much you can do about any of this but we thought you should know. Especially, because anytime you can demonstrate that your health is improving (like say over the first year) or even that you are a “responsible patient,” (checking in with the doc regularly, taking your meds like a good girl etc.) you can bring down your premiums.

Thing No. 9  

Times change.

Check your policy at least every three years or if there’s been some major change in circumstances.  New offspring, mortgage balance, anything that would alter the amount that needs to be paid if (or should we say when) you check out.  Get a rider if you need to expand your coverage so you don/t sacrifice any built up value in your policy.

Thing No. 10  

Costs only go up the older you get

If you buy when you're in good health, your term policy will let you renew without being forced to pee in a cup again and, you can also lock in your premium.

Thing No. 11  

Check your credit.

Other than having to pay your family because you went and died, the last thing the insurance company wants is for your policy to lapse for missed payments.  When that happens, that big fat bonus/commission they paid to whomever sold you the policy is gone and so is the premium they were collecting from you.  That upsets them deeply, check equifax.com.

Thing No. 12  

Pay annually.

They'll charge you more to make monthly payments.  If you have to make payments, have them automatically deducted from your checking account so they won't charge you quite as much more.

Now, off you go.  Don't walk under any ladders.  Or, in front of any cars.  Rest assured though that if you do, your family won't be on the street and, if the Buddhists are right, before you know it, you'll be back in first grade again.