Choosing an insurance policy

Everything you need to know before choosing an insurance policy

There are many different types of insurance available, and to choose one, it is important to work with an agent/broker get an accurate assessment of your circumstance and needs.

Assessing your insurance needs

Your insurance agent/broker will probably ask you many personal questions about your family, health, finances and your future plans. Any personal information you provide is confidential. Be honest – tell them what you think you might need and what you can afford. Misleading or erroneous information could invalidate your policy.

Sharing the most up to date information possible, will ensure your agent/broker can match you with the best insurance policy for your circumstances.

Once your agent/broker has gathered all the relevant information they should be able to tell you:

  • The type of insurance that you need and how much – they should be able to explain why their recommendation is the best type of insurance for you and how they came up with their numbers (how this type of policy meets your needs and circumstances)
  • How much coverage you will need if you have dependents, a spouse or children
  • If there are alternatives or options to what they are recommending
  • If they will provide policy illustrations to you
  • When you will receive a copy of your application and your policy
  • If you can increase or reduce the benefits and premiums at a later date if your personal situation changes

You can absolutely speak to a couple of different agents/brokers, to see what their recommendations are. Make sure that if you do this you share the exact same information with each of them so that they are all starting from the same point.

What to ask your insurance agent

Regardless of the type of insurance that your agent/broker recommends there are some basic questions that you should be asking them to make sure that you fully understand what you are buying. For example:

  • What date does your coverage come into effect?
  • What does your policy cover?
  • Do you know what is not covered by your policy? (Sometimes knowing what is not covered, is as important as knowing what is covered).
  • Is the policy you are about to purchase, replacing a different insurance policy? If yes, why is it being replaced — and what will happen to the old insurance policy?
  • If you don’t want the policy anymore, will you be charged a fee to cancel it?
  • Are the premiums guaranteed to stay the same, or will they change at some point in the future? Why might they change?
  • Are the premium projections guaranteed, or are they estimates based on today’s best guess of future interest rates? This could change how long you must pay for your life insurance policy.
  • If you borrow money to purchase insurance, what will happen if your policy decreases in value?

Providing accurate information to your insurance agent and asking them questions will help ensure you are making informed decisions when purchasing an insurance policy, and choosing the best one for your specific circumstances.

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