How is Life Insurance Sold?

Individual Policy

When you acquire an individual policy, you choose the company, the plan, and the advantages and features that are perfect for you and your family. You might be able to buy the policy from the same agent or representative who owns your auto insurance, property, or business insurance. Although you won't qualify for any discounts by buying your insurance from the same agent, working with a single insurance agent for your insurance needs can make your financial management more straightforward.

Typically, policies are sold through insurance agents or brokers. If you decide to buy a policy using one of these professionals, you will be charged a load, which is also known as a commission. The commission will compensate the agent or broker for the time he devotes to helping you select the appropriate type of life insurance, facilitating the application process, and ensuring future policy maintenance Such as changing beneficiaries, establishing financing plans or coordinating your financial plan with your accountant and lawyer.

In Connecticut, Massachusetts, and New York, you may purchase an individual life insurance policy in two ways. You can either purchase it directly from an insurance company or a  no- load  or  low-load  policy from a fee-only financial adviser. As long as there are no sales commissions on these plans, the company will probably still have charges built into the premium to take care of its expenses for marketing, processing applications, and subsequent services. Finding an insurer that will sell you a no-load life policy isn t easy; searching online for  no load life insurance  usually leads to an agent or broker.

Group Policy

You might have life insurance that’s automatically provided to you by your company; many large employers do. Your company may also offer you the chance to obtain additional life insurance under a group policy, too. And you can qualify for life insurance under a group policy from a group or union or other business that you belong to (such as a college alumni association or an automobile club).

Group life insurance has several advantages over purchasing individual life insurance: 

* Sometimes a group purchasing life insurance can offer a lower rate for an individual premium because the employer or other sponsor subsidizes the expense or as the average age of the group is older than yours.

* Few sources of information exist for obtaining the group coverage.

* Often, premium payments are made by payroll deduction (for employer-based group coverage) or with the help of other payments (e.g., credit card payments), minimizing the likelihood of a missed payment.

Most employer group plans are short-term life insurance, but if you leave that company your state may require that that policy be converted to term life insurance with the same coverage group that sponsors the group life insurance. After paying for the total costs yourself, you would keep the life insurance active and continue to pay the monthly fees. This could be useful if you were older, or have a pre-existing condition, and were able to qualify whole life insurance coverage without undergoing a complete medical exam.

Credit Life Insurance

Credit cards and lending institutions can provide you with life insurance to forgive outstanding loans in the event of your passing. This may typically be provided in two ways:

1. In many cases, the insurance policy for this loan is paid by the creditor and is part of the interest rates or other costs of credit. If you have this type of credit life coverage, you do not need separate life insurance to pay off that obligation in the event of your death.

2. Rather than opting for the optional insurance at an additional cost, you'll need to choose to decline it if you've got another life insurance plan that may pay off the loan if you die. If you don't get insurance below 50 and you don't have another insurance that could pay off the loan, you'll have to decline the optional insurance coverage, Each individual should consider taking optional credit life insurance as it's likely to be an more affordable alternative. For middle-aged folks and a number of health issues, if you've been searching for life insurance for this purpose and don't have another life insurance policy, see the optional credit life insurance policy. I hope you enjoyed this session on everything you need to know about How is Life Insurance Sold? So always be sure to contact a professional before making any financial decisions.