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7 tips for buying life insurance

If you’re thinking about life insurance, here are some helpful tips:

1. Shop around – know your prices Be aware that life insurance premiums can differ by up to 50% between insurance companies. Some of the Brands that you think should cost less, often cost more. Pays to check out pricing yourself. You can get quotes on-line form several on-line brokers. If you get an online quote from Pinnacle Life, you automatically get 4 comparisons. Remember, life insurance is essentially a simple commodity with little to distinguish between products – you should not have to pay the earth for it.

2. Don’t buy ‘gobbledygook’ The language used in most life insurance contracts is a combination of legal mumbo jumbo and insurance-speak. If it’s too difficult to understand, don’t buy it. There are policies you can buy that are written in simple, plain English. That way you know what you are buying. See earlier blog post.

3. If you can’t afford the cover you need, buy the cover you can afford Most insurance agents will work through a process to calculate how much cover you need. When they give you the number, it may seem like a lot and you may find it more than you can afford, or simply more than you are willing to pay. This shouldn’t mean you should avoid buying life insurance. Take charge - decide how much you’re willing to spend, and buy the cover. Even if it doesn’t completely meet your needs, some cover is better than no cover. See earlier blog post.

4. Buy when you’re young and healthy – don’t wait till its too late Healthy people get better rates on life insurance, because you are expected to live longer. So when you are young and healthy, that’s the time to buy. You’ll enjoy lowest premium rates for life. If you wait until you have a medical problem you’ll pay more – or be lucky to get cover at all!! See earlier blog post.

5. Don’t rely completely on ‘group life cover’ offered by some employers Some employers offer their employees some type of ‘group’ life insurance plan. However, this amount of life insurance coverage is usually not enough to meet all of your life insurance needs. Also, group life insurance policies are often not portable… meaning that if you leave your job, you can’t take your life insurance coverage with you or if you do, it can cost an arm and a leg.

6. Check how much commission is paid Some insurance companies pay as much as the first 26 months of your premiums to the agent that sold you the policy. Make sure you’re comfortable with that. Remember, you are paying for that through the premiums. If you are not comfortable, consider buying your policy direct, online.

7. Answer all life insurance application questions truthfully If you’re thinking about lying on your insurance application, don’t. If your insurance company finds out that you lied about a health-related condition or your lifestyle (e.g., using drugs or smoking), they may be able to cancel your life insurance policy.

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