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Things To Avoid When Getting Insurance

You are aware of your vulnerabilities as a human being and know that your family needs to be protected in case you are suddenly taken away from the scene. But before going further about insurance, there are some things that you need to consider.


If you already have one and an insurance agent advising you to replace it approaches you, think twice before agreeing to the proposition. There are many unscrupulous insurance agents who advice it simply to put cash in their pockets. Replacing a term insurance may make sense since terms are much cheaper today than before but be careful when it comes to universal life or whole life insurance. Your insurability is not the same as before because of your age and corresponding risks, and so your new premium will be higher. A lot of these policies are also locked at favorable rates and surrendering them entails high surrender charges.



If you are offered a non-medical life insurance take the time to think about it. They carry higher premiums for a corresponding face amount. Also, in the first two years, their death benefit is limited to return of premium plus its interest. If you do not have any medical problem, do not take this kind of insurance as these are designed for people with significant health concerns. If you are not a frequent traveler, do not get an accidental insurance either. Many agents offer this type of coverage to unsuspecting prospects who are lured by its seemingly cheap premium rates. But in reality, it can occasionally cost more than a term policy with equal face amount.



Analyze your life insurance policy and other insurance policies well. The overall cost should be considered more than the initial premium. There are many insurance companies that entice prospects to buy with cheap initial premiums but the succeeding premiums actually add up to a more expensive total cost. The actual coverage of the insurance policy should also be studied well as agents sometimes confuse a prospect with vague explanations of the insurance contract. Being cheap does not mean the best when it comes to insurance.


Be alert of policy exclusions in the insurance contract. All of them contain suicide exclusion but many contracts also have particular recreational or travel exclusions. If the client was engaged in these kinds of exclusion at the time he applied for the insurance, and later met an accident while doing the activity, he will not be covered. Each insurance company has particular underwriting guidelines when it comes to these exclusions so go for the agent who carries multiple insurance packages and is up to date with the different underwriting practices.


Lastly, avoid misrepresenting your personal facts. All insurance policies carry an incontestability period which is usually two years. During this certain period, an insurance company can contest any claims made against the company. If you did not disclose or misrepresented a fact and something happened within this two year period, you may get nothing.


If you get things right, you'll never wind up looking for spare tires in Phoenix because you'll have the type of insurance that'll pick you up and get you sorted. Think about it!