Smart Tips for Buying Life Insurance

Get quotes from several companies. Each insurance company uses its own underwriting guidelines. Life insurance agents are "captive," meaning they can only issue policies for the insurance company they work for. Brokers, on the other hand, are "non captive" independent contractors who can sell policies of multiple insurers.

Compare "apples to apples." Be sure any policies you compare offer similar levels of coverage. The more features, options, and added benefits a policy includes, the more it will typically cost.

Buy the policy that's right for you. The more a policy costs, the more an agent or broker typically earns as a commission. When shopping for life insurance, keep in mind that the policy that's best for your agent or broker might not be the best for your insurance needs.

Make sure your company and agent are licensed. If your company is unlicensed and goes bankrupt, your death benefit could go unpaid.

Research your company. An insurance company's financial strength and customer service record can be good indicators of the level of service you can expect.

Shop for a low-load policy. You may save money, particularly on cash value life insurance, if you buy a policy with low commissions and administrative fees, collectively known as "the load." Financial planners who are licensed insurance counselors often sell these policies.

Use your "free-look" period. Use this time to read your policy carefully to be sure the coverage is right for you.

Remember if one kind of life insurance does not seem to fit your needs, ask about other plans. Be sure to read your new policy carefully, and ask the agent or company for an explanation of anything you do not understand.

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