Tips that help you get the best value for your life insurance dollar

Life insurance is an important purchase for most Americans because it can provide income
replacement to beneficiaries in the event of a death. Life insurance policies are available from
more than 2,000 life insurance companies in the United States.
1. Review Your Insurance Needs
Choose the kind of policy that has benefits that most closely fit your needs. Consider the number of people
who are dependent upon you financially and whether or not you need life insurance. Will you have
substantial debts and taxes owed after your death? Do you have alternatives to life insurance, such as
savings accounts or other investments that could take care of expenses after your death?
2. Know Your Options
There are two basic types of life insurance: term insurance and cash-value insurance. You may wish to
combine cash-value life insurance with term insurance for the period of your greatest need for life
insurance to replace income. Make sure the price is right. If the premium increases later and you still need
insurance, will you be able to afford it?
3. Comparison Shop
Life insurance is a competitive marketplace, and much of the competition focuses on price. After you have
decided which kind of life insurance is best for you, compare similar policies from different companies to
find which one is likely to give you the best value for your money.
4. Know Your Company
You can check the financial stability of any life insurance company through several reputable national
rating companies.  Some of these ratings are available at public libraries. Check with your state insurance
department to verify that the company is authorized to do business in your state.
5. Read Your Policy Carefully before Signing
Never buy a policy you don’t understand – if you are given illustrations or booklets, save these materials
with your policy.  Make sure you understand the guarantees in your policy and the surrender penalties if
you choose to drop the policy at any time.  Ask your agent or company about anything that is not clear to
you.
6. Regularly Review Your Policy; Update Accordingly
Review your life insurance program with your agent or company every few years to keep up with changes
in your income and your needs. This includes a review of your net worth to reconsider the prospects your
survivors may face when you pass away.
7. Consider Replacement Cost
It may be costly to replace your insurance if you change your mind during the early years of the policy.
Don’t drop one policy and buy another without a thorough study of the new policy and the one you
currently have.