Few people will argue with the idea that it is wise to invest in health and life insurance. Health care expenses alone can force a person to file for bankruptcy, especially when a major illness, like cancer, occurs. This cost only increases with age, a time when people also start thinking of how family will fare after they pass away. As a result, older Americans are likely to acquire health and life insurance, but accepting the necessity of a purchase does not necessarily translate to a knowledgeable choice. For those searching for health and life insurance, here are six tips to help.
- Compare, Compare, Compare: Never, under any circumstances should a consumer stop looking at the first option they find that fits their budget, or worse, the first plan they see. Federal legislation now prevents many catastrophic deficiencies in insurance that left people high and dry during major illness, but there are still differences in plans. Every person needs to purchase what is best for their individual needs, whether that is essential health benefits or supplemental insurance plans.
- Look Past the Premium: When comparing all available options, consumers should always look for the entire cost of each plan, or all of that effort can be counted as a waste. Most insurance companies are structured to include some degree of cost-sharing with their customers. This can take a number of forms, such as co-payments or deductibles. Be careful not to commit to a plan with a low premium, that more than makes up the difference with other fees.
- When In Doubt…: In the face of any confusion, or any doubts about the best choice, ask an expert. This is a decision with enormous financial ramifications, so guessing should never be a decision making technique.
- Compare Here Too: When temptation strikes to make this decision quickly due to the general tendency toward discomfort at thoughts of death and dying, consumers would do well to fight back against the urge to just pick something and be done with it. Furthermore, a search for life insurance should not focus on whole life options to the exclusion of term life. Compare both options with a financial advisor if possible due to the fact that this decision can have a negative financial impact for decades if done poorly.
- Payment Up Front: Occasionally, consumers will hear of someone getting a life insurance policy, only to die suddenly in a freak accident before the policy went into effect. This is no urban myth, it is insurance company procedure. The simple way to prevent this is to include the first payment with initial documentation, which makes it legally binding.
- Know What You Need: Although it is a nice thought to leave surviving relatives a financial windfall, but life insurance is not designed to be the get-rich-quick avenue for anyone. An examination of the financial impact of a person’s death should be a priority. With no dependents, or in the case of individuals that managed to save a substantial sum, a large life insurance benefit might be wasted money, especially if a lower payment would grant better quality of life until the day the individual passes.
There are many issues to account for when buying health and life insurance, and these decisions should never be made lightly or without extensive consideration. Consumers should never avoid professional advise when needed because the potential negative impact is so great. However, with these tips, and advise when needed, the purchase should go smoothly.
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