While there are several ways to save money on life insurance, comparing different plans among different insurers is not done frequently. Typically, this is because purchasers deal with agents or sales representatives that they know. Others believe the myth that insurers basically offer the same plans.
Comparison shopping ensures that you get the best overall value. However, comparing insurance plans must not be done with the specific intention of choosing the lowest premium. The objective must be to find a plan that provides the best value in relation to an affordable premium. This includes a comparison of premium rates, plan structures and benefits among different insurance companies.
Best coverage
The best coverage is one that best fits your needs. Coverage refers to more than the sum insured on a life policy and premium rates. Life insurance is complex enough to include several optional supplementary benefits. These benefits include income disability, dismemberment coverage and critical illness- to name a few.
Insurers may carry the same plan types, but plans can be structured differently. When you are comparison shopping, you ought to compare plans that fall under the same category or plan type. It is necessary to assess whether the coverage suits your needs before you entertain premium considerations.
Insurers may have the same optional supplementary benefits. For instance, two insurers may have critical illness attached to their life plans. However, one insurer covers 24 critical illnesses while the other covers only 20. These fine details must be taken into account when you are making the effort to comparison shop.
For cash-value life insurance, there is the portfolio performance factor. Although cash-value plans are categorically rubbished by some “experts”, some insurers actually offer fair overall returns on plans. Others may offer a bit of insurance nonsense that lends credence to the view that cash-value insurance is crap. Carefully selecting the returns that you get (minus front-end charges and other expenses) can enhance your insurance experience.
Best price
Insurance premiums can differ significantly from one insurer to the next. While premium amounts may be somewhat similar; over time the savings would be huge. Relating value to the premium is necessary if it is difficult to separate plans from different insurers. Insurers have their actuaries determine premium rates that reflect how much every thousand dollars of coverage would cost.
These rates would be multiplied by the amount of coverage requested and adjusted according to the mode of payment as well. Unless insurers offer information related to premium rates, you have to compare the premium amounts for the same coverage, benefits and payment modes.
Comparison shopping online and through brokers
More insurers are providing plan information and even insurance quotes online. This makes it possible to compare at the click of a button. Therefore, no hassle or runaround has to be involved when comparison shopping. Brokers are also another way to ensure that you get the best deal. However, this depends on the integrity of the broker. Trusted sources are really important when having comparison shopping done for you.
Comparing insurance plans among insurers is no easy task. It involves more than assessing quotes from different insurers. You must delve into the terms on the life insurance contract and plan specifications. If you take shortcuts when comparison shopping for life insurance, you may experience buyer’s remorse sooner or later. Whether comparison shopping is done by you or on your behalf, it must be done knowledgeably and fairly for the best value at an affordable premium.