Life insurance is highly recommended for all. If you are a breadwinner, a good policy will ensure your loved ones are financially secure when you die. However, you need to be sure you are buying from a reputable company to avoid an insurance scam. Buying insurance from an illegitimate company can prove a legal nightmare. Your family will be left without any financial support or stuck with a legal battle when you are no more. In addition to comparing life insurance quotes online, it is advisable to research prospective service providers. Furthermore, reading the contract carefully will save you many hassles and unsuccessful surprises. The steps for buying insurance and avoiding scams include:
Step 1: Shop for insurance
You can consider using the services of a reputable insurance agent to help you find the right plan. For the best results, it is advisable to work with an independent agent who will not steer you towards a particular provider or plan. By comparing different life insurance quotes online you will avoid unusually high commissions. Furthermore, research the available options by asking your friends and family about their insurance plans. Perform a background check of the service provider with the local business bureau, the trade commission and read online reviews. This will help you avoid a company with many serious complaints.
Step 2: Insurance needs
It is important to know how much insurance you need. Although it is not fraudulent to have a company selling more coverage than you actually need, it means you will be paying more for your policy than you really have to pay. On the other hand, if you purchase less insurance, your loved ones will be left unprotected. To help you determine how much coverage is right for you; at a minimum, the policy should cater for your debts, end-of-life medical expenses and funeral & burial. Some experts recommend a coverage that accounts for 50% of your total income until retirement. Therefore, if you earn $ 50,000 a year and plan to retire in 5 years, then you need coverage of $ 125,000.
Step 3: Review the policy
It is important to review the terms and conditions before signing the contract. Some of the insurance companies require applicants to make the initial administrative costs prior to their medical exams. This means you will be paying for the product before you are qualified for insurance. If you opt for a scam, you will lose your money. Furthermore, reviewing the policy helps you to know the features provided in a policy. Some of the features (add-ons) may not be necessary for your case. Therefore, you can save some good money by avoiding the add-ons.