How to navigate the life-insurance labyrinth

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Life insurance is one of those financial matters that is often complicated, time consuming and expensive. People are often naturally cautious of life insurance when they cannot understand the labyrinth of terms, scenarios and cost structures set out by the policy. This is a financially healthy perspective to take and reflects awareness of possible red flags in the insurance acquisition process.

Clarify

The terms of life insurance influence cost, however these conditions are not always favorable. For example, in a CBS MoneyWatch report, it is pointed out that the age of an insured person at the time of death affects pay outs. If this age range is unrealistic, then the benefits of the insurance are less likely to be obtained. When reviewing a policy ask specific questions that clarify broad claims. For example, if an insurance agents says the return of policy X will be Y amount per year that may be true, but is that before or after additional surcharges and fees? 

Research

Numerous variables affect the quality and cost of life insurance. For instance, according to the Wall Street Journal, life insurance agents have an advantage over brokers because they can offer lower rates by working with a single insurer. Being aware of all the factors that influence a policy as well as the various types of policies is important. To build consumer awareness, also consult and compare insurance ratings from companies such as A.M. Best, and take time reviewing the policy details before signing anything. 

Evaluate

Knowing how to assess and evaluate life insurance involves more than just referring to ratings and assuming it is the right financial decision. To illustrate, the insurance needs of a single person with no debt and no children are far different from those of an indebted single parent of three. Identification and incorporation of financial planning goals, in addition to individual and family needs is prudent before embarking on a long-term life insurance contract. Completing a life insurance question list such as the one provided by the Motley Fool Insurance Center is one way to accomplish this task. 

Decide

There should be no pressure to decide whether or not a life insurance policy is the right choice. Offer expirations, time related policy benefits and incentive rates are somewhat relevant, but also distracting to overall financial objectives that are more important. Effective policy choices take into account individual health, available insurance products, agent compensation and much more. Self-educating via sources such as CNN Money's "Money 101", rather than relying on just what a salesperson says helps with making informed decisions. 

Life insurance is a financial instrument that serves to protect financial needs and interests in addition to being a potential source of retirement savings. Life insurance products do have some advantages such as creditor protection, however they also have costs and require substantial financial commitment. When assessing life insurance, and in order to fully benefit from a policy, it is wise to consider future financial scenarios such as affordability after layoff, and opportunity cost in addition to financial security.

How to Find a Life Insurance Agent

Finding the right life insurance agent may be best facilitated by utilizing several steps that distinguish, discern and assess the various aspects of life insurance that are important. For example, life insurance credibility, benefits, products and process are all factors that can add value to a life insurance policy. This article will discuss some the variables that life insurance shoppers may consider when finding a life insurance agent. Specifically, the following items will be discussed:

• Life insurance company
• Financial goals
• Helpfulness and capability of the Insurance agent
• Quality of life insurance products
Choosing the right insurance company is a good first step in finding a life insurance agent. Different life insurance companies have varying performance, credibility and client services capacity which includes how well the agents are able to discuss your needs, and goals in combination with their products.

Finding the right life insurance company can involve a little due diligence i.e. researching the company by contacting insurance regulators, searching the web for consumer reports, studying the performance of the company's mutual funds and comparing costs with other life insurance companies. It can be helpful to select three or four companies during your research so you can make comparisons after meeting with life insurance agents.

It can also be helpful to identify your goals before setting up an appointment with an agent. For example, do you want a policy that also has cash value, how much monetary coverage do you need, what events do you want covered by the insurance etc. Your life insurance needs should be matched by a specific policy available through the insurance company.

The next step involves calling the companies and asking to meet with an insurance agent. Making mental and/or written notes throughout the process can help you ascertain which agent and company you feel most comfortable with. Things to look for include professionalism, clarity of the insurance products, and the ability of the agent to answer questions and explain the insurance products well.

Once the agent meetings are completed, take some time to think about everything they have told you because there is likely to be a lot of information to process. Asking yourself questions like how much is this going to cost? are there hidden fees? what happens if the investment products don't perform? and what guarantees does the insurance company offer? may be beneficial.

The life insurance products available through an agent and/or insurance company are also important as it is the history, quality, range, scope and success of these insurance products that can make one life insurance product, and therefore the agent that sells them, better than another life insurance policy. Life insurance terms, benefits, tax incentives, financial vehicles etc. can be complicated at times so it is also helpful to choose an insurance agent who can adequately explain those products and answer questions about those products.

In summary, finding a life insurance agent can be a bit of a process. However, since life insurance is often a long term decision affecting retirement planning, family finances, the policy holder, and his or her beneficiaries, carefully choosing a life insurance agent is important. This article has outlined some of the key factors to consider when finding a life insurance agent including the agent's qualities, the company and the products he/she represents.