When shopping for life insurance, your goal is to find the right coverage at a reasonable price with a company you can trust.
Ready to Shop: Life Insurance Checklist - Part 2
Now that you're ready to shop for your life insurance, there are a few details you should consider to make certain you select the right options at the best price.
1. Compare life insurance quotes from multiple companies
It pays to shop around because life insurance rates can vary considerably depending on the product you choose, your age, and the amount of coverage you request. This is the easy part, because at Kanetix we can help you shop through our Kanetix Life Insurance comparison service. You can compare life insurance quotes easily, online, anytime.
2. Know which life insurance rate you're being quoted
There are two basic rate groups you should know about when shopping for your life insurance: standard rates and preferred. Standard life insurance rates are the rates the majority of Canadians qualify for, while only about one third of the population is eligible for preferred rates.
Preferred life insurance rates are offered to exceptionally healthy people and means that you may pay a smaller premium than most. Usually preferred rates are offered only once the results of the medical information and tests are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But preferred rates are worth it. They could save you up to 30-35% off your quoted premium.
When comparing life insurance prices, make sure you're comparing 'standard to standard' or 'preferred to preferred' rates. If you're not sure, ask the broker directly which rate you're being quoted. It would be disappointing to find out you were quoted preferred rates at the beginning, only to find out you don't qualify for them later.
3. Review the broker's availability
How easily can you get a hold of the broker? What are their hours of operation? Whether it is through their website or telephone the broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. Look for toll-free numbers and extended hours of service as guides.
The life insurance advisors featured through the Kanetix site are available to go over life insurance needs and answer your questions online, over the phone or by email - all with no obligation to buy and no sales pressure.
4. Review the medical information required to obtain the policy
Typically the more medical information you provide, the better the price. For a life insurance policy that asks few or no medical questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you could be asked to provide blood and urine samples. To obtain the samples, a nurse will visit, at not cost to you.
5. Consider an insurer's financial stability and strength
A company's financial stability is something to consider if you are planning on making a purchase like life insurance. Financial rating information is available for the companies featured through Kanetix and can be viewed when you receive your quotes. The information is provided from the A.M. Best Company, an independent organization that evaluates insurers against the same criteria and rates them accordingly.
6. Ask about renewal options and requirements
Once the initial premium is set, it should be guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most policies are renewable until you are 70 or 75. But don't forget to ask your broker if you will have to take a medical to renew your policy. While your premiums will be higher on renewal, find out if they will also be guaranteed to remain level for the second term of the policy.
7. Confirm the policy can be cancelled without penalty
Most term life insurance policies can be cancelled at any time without penalty. Make sure to check with your broker to see if the insurance company has any unusual cancellation policies.
8. Consider the conversion options and restrictions for the policy
As your life changes so do your insurance needs and you may want the option to convert your coverage some day.
To convert a term life insurance policy means to transfer all, or part of, the death benefit of the policy into a permanent life policy without a medical. For example, say you originally bought a term policy to protect a mortgage and child. Once the mortgage is paid and the child grown, you might find it desirable to convert the policy into one that will give you a new level premium for the rest of your life, and a death benefit that is guaranteed not to expire as you age.
When you purchase your policy, find out if there are any limitations on your age at the time of conversion. In most cases, you have the option of converting up until you are 60 or 65. As well, ensure you are given several options of the type of policies you can move into, the more the better.
Choose a broker you trust
While it doesn't necessarily impact the type of policy you choose to purchase, a rapport with your broker is critical in feeling comfortable with the policy you buy and the information you've received. The same holds true for many other products including disability and critical illness insurance, long-term care coverage and other investment products. That's why it is important for the broker you work with to also be able to offer you advice on a wide range of products.
Get an online quote today for your life insurance needs at Kanetix. Our featured insurance advisors will help you with the coverage you are seeking and answer all your questions.