10 common life insurance blunders ( USA based )

I admit it. I'm a Letterman fan. When Johnny Carson retired from the late night scene, and

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Letterman and Leno moved to late night center stage, I channel surfed right over to Dave. And, I've been there ever since. I usually fade to black somewhere between the monologue and "Will it Float?" But, when I do manage to stay awake a little longer I really enjoy Dave's Top Ten. So, I've been working on my own Top Ten. My Top Ten isn't funny. But they could just save you a bunch of money if you'll take them to heart. These are the Top Ten mistakes I see consumers make every day when considering a life insurance purchase.

Blunder #1 - Taking the cheapest quote at face value...

There is no way to get quality low-cost life insurance, appropriate for your needs, without giving it some serious thought and going through the underwriting process. Just because some agent on the other side of the country emails you a cheap quote does not mean that you will get the quoted premium. These quotes are always based on "best case" underwriting. Less than 10% of applicants qualify for the preferred best underwriting classification these quotes are based on.

Blunder #2 - Asking for a quote from multiple web sites.

A computer generated quote can be a good starting point to your search for cost effective life insurance. And, if you are totally honest about your physical condition, medical history, and hobbies, you may get a pretty good idea of what your premium will end up being. But, if you choose to use one of the dozens of "free quote" services, plan on getting 5 or more phone calls from insurance agents. These services make their money by selling leads. And, you become a lead by keying in your information. Leads generally cost between $10 and $20, ( cheap loans ) whether or not you buy anything. And, the lead companies often sell your information to 5 or more agents. I've known clients who have asked for quotes from 2 or 3 sites and gotten 15 or more phone calls.

Blunder #3 - Buying permanent insurance when term is more appropriate...

The fact is that insurance agents can usually make more money by selling you a whole life or universal life product than a simple term policy. "If" these products are the right ( loans ) products for your needs - ok. But, often they simply are a bad fit. It all depends on why you are buying life insurance and how long you expect to need it. An insurance agent's job is to identify the right insurance product, and get you the best possible value. If you suspect that your agent is more interested in making money than helping you, fire him or her. And, hire someone you can trust. One more thing, if some slick operator does manage to twist your arm. You always have 10 days, after you receive the policy, to cancel for any reason. The 10 day "free look" is the law.

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