In a previous article . Smart Parenting covered the different kinds of insurance available. Now that you know the basics, here’s how to get started buying insurance.
The business of insurance is quantifying loss
How much income do you stand to lose if you lose your job, if you become disabled, or if you involuntarily decide to stop breathing? This will give you an idea of the kind of insurance you will need. And this is why people buy insurance in the first place—to give a measure of security and control for themselves and their families over the uncertainty of the future. Insurance is important because it gives you money when you need it most, and it forces you to save money for your family and your future.
Get a good insurance agent
An insurance agent or good personal financial planner will have a referral list from people who are happy with her work. Get someone you trust. Go with an insurance agent your family and friends recommend. Experienced agents will thoroughly interview you for personal information like how much you spend and save and your personal assets, to properly assess what your needs are (financial stability, securing family, retaining earning capacity, etc.). A good agent won’t shove just any product down your throat—she will keep working until she figures out what exactly is right for you.
Match need with capability
Once your needs have been identified, your agent has to match the product that will be most effective and beneficial to you, given your current income. Most basic traditional permanent plans have a high coverage for a small premium and are ideal for people who are starting out. More unusual plans with riders (extra added benefits) can be for people with greater earning capacity and greater needs (a breadwinner who needs to support a spouse and children).
Check out the company
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Looking at a company’s background is important in choosing a policy; after all, you don’t want to end up in the cold because they went the way of Enron or Bear Sterns. Information such as history, products and the people running the company are available online, in business magazines and newspapers. For deeper research, you can look at www.standardandpoors.com for a more accurate assessment of your potential insurance provider’s international standing. Ideally, the good companies have been around for a century or longer, have exemplary track records and above all, a history of easily paying for insurance claims.
Read the fine print
Go over the policy details with the agent and with other people you trust. If you can, get a lawyer to look at it too. Reread and clarify what you can expect so there are no unpleasant surprises when you or your loved ones have to use it. In 2009, a lot of people with car insurance were unpleasantly surprised that their plans did not cover acts of God, like Typhoon Ondoy. Now that you know how to get started buying insurance, it’s time to do your research and secure your family’s future.
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