|
Determine How Much Life Insurance
Is Enough
After familiarizing yourself with
the basic types of insurance, you need to deterrmine
how much insurance you need.
First, you should gather some personal
financial information and figure out what your family's
needs would be. Here are some things to consider when
you're determining how much life insurance protection
you'll need:
* amount of final expenses, such
as medical expenses, burial costs and estate taxes;
* money to finance a short-term re-adjustment period
for your family, such as providing time for family members
to find a job;
* continuing financial needs, such as monthly bills
and expenses, tuition or retirement.
There is no hard and fast formula
for figuring out how much you'll need, since each family's
situation is unique, but one place to start is to consider
buying life insurance that'is equal to five to seven
times your annual gross income.
Choosing an insurance company
If you are already considering an
insurance company, There are a few things you should
find out about the comapny.
First, check with your state insurance
department to be sure the company is licensed to do
business in your state. Most companies that advertise
in your state are licensed there, but it's wise to verify
this anyway.
Always check a company's financial
condition before you buy a policy. You can ask your
agent or phone your state's insurance department. There
are several services that rate the financial strength
of insurance companies and you can usually find this
information at your public library or get the information
from the rating service. Don't forget that most companies
now have websites that will provide this info, too.
Picking an insurance agent
An insurance agent should be willing
and able to explain all of the details of the policies
you are considering or that he or she is recommending.
You should feel that the agent is listening to your
concerns and trying to find a policy that will provide
you with the right type and amount of insurance. If
you're not comfortable with any aspect of the interaction
with the agent, you should probably end the relationship
and find another agent.
Get recommendations from friends,
family and other sources. Here are some factors you'll
need to check with regard to any agent:
State licensing
Every state requires agents to be
licensed to sell life insurance. Also, agents who sell
variable products have to pass examinations and be registered
with the National Association of Securities Dealers
(NASD) and obtain additional licenses.
Professional designations
Many agents will have professional
designations such as Chartered Life Underwriter (CLU),
Chartered Financial Consultant (ChFC) and Certified
Financial Planner (CFP) . These designations indicate
that the agents has spent considerable time and effort
taking courses and passing examinations to gain these
designations in an effort to provide more and better
services to his or her clients.
Professional organizations
The major associations for agents
is the National Association of Life Underwriters (NALU)
and Professional Insurance Agents of America (PIA).
These organizations provide seminars and training for
their member agents to keep them current with trends
and changes in the insurance business. Similar training
and services are provided for financial planners by
the American Society of CLU & ChFC, the Institute
of Certified Financial Planners (ICFP), and the International
Association for financial Planning (IAFP).
|
