Questions to Ask Before You Buy Insurance

When it comes to buying insurance, consumers are faced with many questions: How much life insurance to buy? What is the best insurance to buy? What life insurance is best for my situation?

It’s easy to get overwhelmed. Below is a list of questions that a consumer should ask when shopping for affordable life insurance from the potential provider. If you don’t get the answer you’re seeking, it’s time to head to a different insurance provider.

Questions to Ask Before You Buy Life Insurance

1. How do I know that I’m getting the right amount of coverage for my situation – not overpaying for things or leaving me exposed?

You’ll need to have some numbers jotted down before you can start: projected income needed, value of home and valuables, rough budget numbers.

2. What are the advantages of having different types of insurance policies (home, auto, life, etc.) with the same provider?

Some insurance companies will give you a break if you have all your insurance with them.  The concept might sound good, but double check to make sure you’re still getting the best deal.

3. What disadvantages are there of having multiple insurance policies (home, auto, life, etc.) with the same provider?

As mentioned above, you might not get the best price.   The other big worry is what happen if the insurance company fall upon hard times.  Remember AIG?   You’ll want to make sure that they have a solid credit rating.  You can check with Standard and Poors or A.M. Best to find out how solid the insurance provider is.

4. How can I understand what comprises a good policy for my situation under each of the insurance categories?

You’ll need a PhD in insurance to fully understand the policy.  Since that’s not a reality, you need to find an insurance agent that can S-P-E-L-L it out for you in layman’s terms.

5. How does your company make sure that I can get smart, trusted advice if my personal situation changes?

Your insurance agent should have a good back office support to help keep them abreast of all the rule and regulation changes in the insurance industry.

6. What can I do to make sure that I get all of the discounts I’m entitled to?

If you’ve decided on an insurance company, it wouldn’t hurt to call the back office to make sure you’re getting the best deal for what you are buying.

7. Are there benefits to renewing with the same company when my policy ends?

You may be entitled to some discount for sticking with one company.  Be sure to find out before you decide to switch to another company just to save a few bucks that you would have received anyway without the hassle.

Questions to Ask Before You Buy Insurance

8. How can I ensure that I’m making an apples-to-apples comparison if I’m price shopping among several companies?

If you’re shopping  a 30 term life insurance policy with one company, make sure you’re not comparing it with a 30 year term life policy with a return of premium rider on it or a whole life policy.

9. How can I make sure that my insurance decisions fit into my overall personal financial picture?

Set up a meeting with a Certified Financial Planner™ to review your needs and make sure that you and the insurance agent isn’t missing something.

10. What is the impact on me if I file a claim? Explain to me why my policy goes up when I make a claim? How is this protecting my financial needs if my insurance company raises my premium?

Fender benders seem common enough, but how much will it effect your car insurance premium

11. What are the most overlooked discounts that are relatively easy to get?

Are you a veteran or an alumni from a university?  You may be entitled to a discount on your insurance.  Don’t know unless you ask.

12. How frequently should I review insurance policies to ensure they are up-to-date and meet my needs?

You should review your insurance plan with your insurance agent at least once annually.  That way you make sure you have all the coverage you need for the best price.

13. How can I tell if an insurance agent is being “straight” with me, or just trying to sell something else?

Have your doubts, compare what that agent is saying with another agent.

14. Do my kids get a discount when they buy a policy with the same company that I have been with for years and years?

Your kids might benefit from the family discount.

15. Will a poor credit rating influence the coverage I qualify for and my premiums? How do I know if an insurance agency is investigating my credit report? Is that legal?

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