How to Find the Right Life Insurance Company for You

Life insurance can often be a difficult subject for many people to think about. As humans we often naturally avoid thinking or talking about topics that involve our own mortality, or that of those we love. However most of us also know how important it is to have financial protection in place for our family in the event that the worst happens. So for those looking to make sure that the proper life insurance coverage is in place, how would we know which life insurance company out of the hundreds of options has the right policy to fit our specific needs? This can be a difficult question to answer, and no one company is the right fit for every person looking for life insurance. However, there are some important aspects one should think about when deciding on the company to go with.

Financial Strength

The financial of a life insurance company is paramount when considering the various options available. Companies are given grades by ratings firms such as A.M. Best who assess the ability of a given company to pay claims and fulfill their obligations to their policyholders. A company with strong financials, a solid record of paying claims, and strong customer service will likely have an A or A+ rating. Knowing that you are insured by a company with a long history of doing the right thing for their policyholders and with strong assets for their ongoing business requirements will give you great peace of mind.

Captive or Independent Agents

An important aspect to consider when shopping for life insurance is whether the agent you are in contact with is a captive or independent agent. A captive agent is contractually obligated to only sell the insurance products offered by the one company they are contracted with. For example the agents of companies such as New York Life, Northwestern Mutual, State Farm, Met Life and many others are typically captive agents who primarily sell their company’s products to their clients. An independent agent has no obligation to any one life insurance company and is often contracted with numerous life insurance companies. This allows the independent agent to shop around from the various companies they have partnerships with to find the right life insurance policy to fit each individual client’s specific needs. At Pacific Insurance Group we are of the independent variety, we specialize specifically in life insurance and are proud to be able to offer products from many of the top life insurance companies in the United States. While captive agents may have the brand awareness of a large company backing them and may also be able to offer additional forms insurance beyond life such as auto or homeowners insurance; their limitation to that one company often means they are unable to offer the life insurance policies that have the most competitive prices, best features, or underwriting expertise that an independent agent can provide through the variety of companies they represent.

Bells and Whistles

Many life insurance companies offer specific features called “riders” which are essentially add-ons to the base life insurance policy that enhance the policy in some way. Some riders fairly common are waiver of premium (which allows a policyholder to cease ongoing premium payments in the event of a disability) and accidental death benefit (which increases the amount of money that will be paid to a beneficiary if the insured dies as the result of an accident). Each company offers different riders and many will charge an additional premium to have these features included on a policy. There are a handful of companies that offer very attractive riders without any additional charge, these insurance companies include an endorsement called the Accelerated Death Benefit which is automatically built into their policies. This feature allows policyholders to access a portion of their death benefit while they are still living to help cope with the costs of life changing events such as a terminal illness, cancer diagnosis, or the need for chronic illness assistance. Asking your agent about riders such as these can make your life insurance policy become much more than just simple “death insurance”.

Coverage Specialization

A final but immensely important consideration is to uncover what a particular company specializes in. There are many companies that only offer specific types of life insurance. Some life insurance companies for instance only offers term life insurance while others may specialize in certain forms of permanent life insurance such as whole life and universal life that can offer cash accumulation in addition to death benefit protection. Another aspect of specialization comes in the form of health underwriting. Going with a company that looks favorably upon your specific health and lifestyle situation will often help you get the lowest possible premium payments for a given amount of coverage. Other life insurance companies for instance are very lenient towards people who chew tobacco or smoke cigars, while other companies would give a much more expensive “tobacco rating” for these habits. Working with an agent who knows how different companies underwriting departments view various health risks can be a major benefit to someone shopping for life insurance.

When shopping for life coverage, take the above factors into consideration and you will be well on your way to finding the right life insurance policy to meet you and your family’s needs. The key is taking the first step and reaching out to a knowledgeable adviser who can guide you through the process.

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