How to choose a life insurance provider

Life insurance is something that most people will have to plan for and purchase at some point in their lives. But with so many insurance companies and agents specializing in life insurance, it can be difficult to choose a good provider.

Because life insurance is such a long investment, and because you have so much riding on it, finding the right life insurance provider is crucial. Shopping around for life insurance by visiting different providers, getting quotes from them, and discussing your options with agents will not only help to save you money, but to find the right life insurance provider for you and your family as well. The following tips will help you to find now only the right company, but the right agent as well.

Know what you want before you go in.
While you don't have to know exactly how much you need or know exactly what type of policy you want, it's a good idea to have a general idea of what type of policy you are looking for (whole or term) and a ballpark figure of how much coverage you want. For this reason, it's a good idea to educate yourself on the different types of life insurance and how much you need.

Basically, there are two different types of insurance you can purchase-term and whole life. Term is designed to cover a specific period of time, while whole life is designed to cover you for your entire life:

• Term. This type of insurance will cover you if you die during the term set forth in your policy-usually somewhere between 5 and 30 years. People normally consider this type of policy because it is much less expensive than whole life; annual premiums will run as low as $300 a year if you purchase a policy while you are young and in good health. This is a good type of policy to get if you are particularly concerned about financial security during more expensive periods of time when financial obligations include raising children, paying tuition, or making mortgage payments. Keep in mind that while this type of policy is cheaper, it doesn't have a cash value.
• Whole life. Whole life insurance is insurance that covers you for life, as long as you continue to pay your premiums. This is also often called permanent insurance, since it is designed to cover you for your entire life. Premiums and death benefits remaining constant throughout the life of the policy. However, once a person begins to age or their health starts to fail, whole life insurance will be difficult to come by or the premiums will be very expensive. For that reason, it is best to get whole life when you are relatively young and healthy. Permanent or whole life insurance also accumulates a cash value, which is a portion of your premium that is set aside with each premium you pay. You can access this cash value while you are still alive.
  

Once you have an idea of the type of insurance you want to buy, you can then go about choosing a life insurance provider.

Choosing an Insurance Company
When looking for insurance, you should narrow it down to a few companies first. While the price of your premium is important, that is not all you are paying for-you also want a company that is reputable and will work for you.

Some things to look for when finding the right insurance company include:

• The company's financial state. No one wants to invest in life insurance only to have the company go bankrupt or out of business, so it is important to buy from a company that has a strong financial standing. Life insurance companies are required by law to maintain enough funds to cover all their policies, it is rare that you will find a company that is struggling financially. However, it's still wise to check the company's financial status. You can do this by visiting web sites such as AM Best, which tells a company's financial strength free of charge.
• Licensing/affiliations. Make sure your company has the proper licensing and is affiliated with pertinent associations. For example, the Insurance Marketplace Standards Association works to promotes ethical life insurance sales. Look for a company that is associated with this group if possible; that way, you can be more assured that you are dealing with a company that has ethics and standards.
• Customer service. A company's customer service (or lack thereof) can mean the difference between a customer who stays with them and one who leaves. If you have difficulty reaching someone, or find that you are put on hold for long periods of time, or if the company seems unorganized when you visit, you may want to keep looking. You also want to make sure you are with a company that pays its claims in a timely fashion. AM Best, Moody's Investor Services, and the Standard and Poor are other good websites to check this information and ratings.
• Recommendations from others. You should ask for recommendations from friends, family members, and co workers who already have life insurance policies. Ask them what they like or don't like about their company, and if they would recommend them or go with them again if given the chance.
• Do your research. It's important to research different companies. The internet or public library are good places to go for this.

Once you have found a company that you are pleased with, you can then go about finding the right agent. Keep in mind that you will have your policy for life (or for at least 5 years, if you are getting term insurance), so it's important to have an agent you are comfortable with. Consider the following when assessing whether or not an agent is right for you.

• Does the agent pay attention to my needs? A good agent will not be out to sell you a policy that will get him or her the most money; instead, he or she should assess your needs, ask you the right questions, pay attention to the information you fill out, and then recommend a policy that is right for you based on that.
• Does the agent answer my questions? The agent should be willing to answer your questions in a way you will understand and make sure you completely understand everything before selling you a policy.

• Is the agent properly licensed? Make sure you know the credentials of the insurance agent you are speaking with. Contact your local Division of Insurance to make sure that they are not only licensed, but are up to date as well.
• Is the agent personable? You should feel comfortable with your agent. If you don't have a good feeling about him or her, or if you don't think you click, then find someone else.
• Does the agent pressure you? All agents make money based on their sales, so of course they are going to try and get you to buy. However, a good agent will not pressure you to buy or make you feel rushed.
• Is the agent accessible? If your agent never returns your calls, or takes days to return them, then you may want to look for another agent.

What to expect from a company and agent
When you interview agents about life insurance policies, most agents will go over a wide range of information with you. They'll ask you questions about your age, your finances, your lifestyle, your spouse's job, medical condition, the medical history of your family, personal habits such as smoking, your occupation, and extracurricular activities (if you are a skydiver, for example, you can probably expect to have a higher rate than average). Make sure you answer all of these questions truthfully; in the event that you do die, lying on your policy could result in problems with the payout to your beneficiaries.

Many companies will also have you take a medical exam, in which a blood test will be drawn. Many times, the company will send a medical professional or nurse to your home to conduct the test there for your convenience.

Once you have an agent, you can expect him or her to call you or visit with you on occasion to make sure the policy still meets your needs as your financial or health circumstances change. They should also be available to help you with the claims process.

Finding the right insurance provider as well as agent is an important decision. Because life insurance is such a long policy, you want to make sure you find a reputable agent and company that will meet your needs.