How to Buy Life Insurance Without Getting Ripped Off

Worried you're going to get ripped off when you buy life insurance? Let Byron help you take the worry out of that task by providing practical information to help you buy life insurance with confidence.

Visit our blog and learn more about how much life insurance you need and the kind of coverage that fits your life. If your thirst for knowledge extends past the common questions, peruse our blog at your leisure.

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Hi. I’m Byron Udell, Founder and CEO of AccuQuote.

Did you know that half of all Americans have NO life insurance? None. People just like YOU…with spouses, and children.

When you DIE...what’ll happen to your family? Will they be able to keep the house? How they going to pay the bills? Because they're not going to stop coming. Have you seen what it costs to send just one kid to college lately?

If you don’t have an answer...YOU need life insurance.

The GOOD news is…life insurance is now more affordable than ever! Term Life Policies, for example, costs only A THIRD of what they did just 20 years ago.

There’s no other product that does what life insurance can do. It turns pennies into dollars at the exact moment your family needs it most.

The MOST important thing you absolutely need to get right, the first time, is to make sure the face amount, the death benefit that’ll be paid to your family when you die accurately reflects the economic value of your life.

The “rules of thumb” (like 10 times your annual income) simply don’t work very well. Sure, you can use a “needs calculators” like the one on our website. There’s lots of them out there. And they’re okay, but none of them are perfect. Personally, I’ve always erred in favor of a little more coverage.

Also, make sure any policy you’re considering is not designed to expire before you’re done needing it. For instance, a 10-year term policy may be real cheap, but if it expires in 10 years, before you die...and before you’re done needing life insurance and you’re stuck going back into the insurance market looking for new coverage WITHOUT the good health you have today…then that’s not smart.

When you’re shopping around, insist on only looking at prices from life insurance companies that have a rating of “A” or better from A.M. Best – the oldest and most respected firm that rates insurance companies on financial strength and claims paying ability.

If you’re considering a Term Life policy…ask the agent to explain exactly how the convertibility provision works. WHEN does it expire? WHAT can you convert to, if you ever need to? Ideally, convertibility should last for the entire level term period, or at least to age 65 or longer.

Remember, life insurance companies make their money on people that drop their policies prior to dying. If you’re still alive at the end of your term, the insurance company is happy. They get to keep all your money and pay you nothing.

But if, at the end of the term, you convert your policy to a PERMANENT policy, it won’t run out until you DIE. And when that happens, your family will get a check for the policy amount...tax-free.

That’s how you win the game of life insurance. Just six little words: DIE WITH YOUR POLICY IN FORCE.

You also might want to check out whether the policies you’re considering are available with a RETURN OF PREMIUM or “ROP” feature. An ROP provision means that, even if you don’t die, at the end of a specified period (usually 30 years on an ROP term policy)…you will receive a FULL REFUND OF 100% of the premiums you’ve paid into it...assuming, you’re still alive and your policy is still in force. What’s the catch? Well, ROP policies do cost more than regular Term Life policies. But they cost more because they DO more.

We’re also beginning to see Permanent policies with Return of Premium guarantees built in. Definitely worth looking at, because in the permanent insurance arena, the ROP features don’t add any cost. Some companies offer them, while others don’t.

Whatever policy you buy, make sure that your premiums and your full death benefit is FULLY GUARANTEED. This is especially critical on Universal Life policies. If the premiums AND death benefits aren’t fully guaranteed, then you’re just asking for trouble.

As for Rate Classifications that determine your pricing, keep in mind that lowest rate you can get is "Preferred Plus." And that rate only goes to HEALTHIEST customers.

But "Preferred" is still pretty darn good. The third best class is "Standard Plus," and the fourth best is "Standard."

Now for the MOST important thing to remember if you want to compare the BEST RATES in life insurance. Make sure you’re talking to a broker that handles LOTS of insurance companies…not just ONE. A broker like AccuQuote.