Choosing life insurance is a tough task. Here are a few tips to help you:
1. If an agent or company contacts you and wants you to cancel your current policy to buy a new one, contact your original agent or company before making any decisions. Canceling your policy to buy another could be very costly to you.
2. Take your time and make the right decision. Don’t rush into a decision.
3. When you purchase a policy, make your check payable to the insurance company — not to the agent. Be sure you are given a receipt.
4. Periodically review your life insurance plan, particularly when your financial responsibilities undergo a significant change.
5. After you have purchased an insurance policy, keep in mind that you may have a “free-look” period for 10 days after you receive the policy. You can change your mind during this period. If you decide not to keep the policy, the company will cancel the policy and give you an appropriate refund.
6. If you have a complaint about your insurance agent or company, contact the customer service division of your insurance company. If you still are dissatisfied, contact your state insurance department. Most departments have a consumer affairs division that can offer help.
7. Discuss the insurance plan with your spouse so that he or she understands which gaps the insurance proceeds are designed to fill.
8. Estimate your total insurance needs by examining the needs and various stages of your surviving spouse’s life. Buy insurance to cover those gaps.
9. Term policies will generally provide military families with the most coverage for the smallest premium and are especially appropriate for young families. (Term insurance protects the policyholder for a specified time period: one year, five years, twenty years, etc. It has no savings feature, and is therefore cheaper than other policy types.)
10. Bonus tip: Shop around. It can pay to compare rates from different companies.
