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  • Steps To Choosing Your Life Insurance Company
  • July 25, 2017
  • choosing your life insurance company
    Selecting one life insurance company out of a pool of over 1,600 companies can be an overwhelming task, but with the assistance of some common-sense guidelines this process can become more manageable.

    The first step is to determine your insurance needs: Are you looking for short-term or long-term coverage? How much coverage do you want to purchase? How much of a commitment do you want to make?

    Having a basic understanding of your life insurance needs is a simple, effective way of narrowing down the pool of potential insurance companies and policies.

    Once your insurance needs have been established, the next step is to evaluate a life insurance company from a financial perspective.

    If you think you might need your insurance coverage for more than 10 or 15 years, it is imperative that you choose your insurance insurer carefully while also monitoring companies on a regular basis.

    While no one can accurately predict a company’s viability 20, 30 or 40 years down the line, you should do everything you can to avoid the time and expense of watching your insurer struggle through receivership and sale.

    For example, in 1997 an Oklahoma based life insurance company, Mid-Continent Life, was taken over by the state’s insurance department, which left the fate of 130,000 policy owners up in the air.

    If you are interested in making a substantial commitment to invest in a large portfolio, seeking help from an insurance analyst or independent consultant may be in your best interest.

    For those “net savvy” consumers who are pros at looking up and analyzing financial data, turning to the Internet may be in their best interest.

    Nowadays, most life insurance companies present their information and ratings online, which is free to the public.

    Don’t get caught in the trap of simply comparing two companies and choosing the better one. Instead, hold each company up to a pre-determined set of benchmarks.

    If an insurance agency wants to sell a particular company or policy, it is not uncommon for the agent to offer two or three alternatives that look worse than the one the agents want to sell.

    Finally, don’t assume that it costs more to purchase insurance from a top-rated company.

    Since insurance companies generally have comparable expenses, reserve requirements, and overall investment strategies, buying from the best does not necessarily result in higher premiums.

    Also, policy illustrations are poor indicators of how a policy will perform.

    If you seek further assistance or additional information, please feel free to email me at

    By Tony Steuer, CLU, LA

    Steuer, author of Questions and Answers on Life Insurance: The Life Insurance Toolbook, has more than 25 years of experience and holds the Department of Insurance Analyst License (LA) as well as the Charted Life Underwriter (CLU) designation. Tony holds various leadership positions and has authored three books on the topic of life insurance.

    Steuer’s work has been awarded the “Excellence in Financial Literacy (EIFLE) Award from the Institute of Financial Literacy for his The Questions and Answers on Disability Insurance Workbook and The Questions and Answers on Insurance Planner. Forbes named Questions and Answers on Life Insurance: The Life Insurance Toolbook as one of their top nine great investment books.

    He’s also the founder of the Insurance Literacy Institute and creator of The Insurance Bill of Rights designed to empower consumers and to identify members of the Insurance Industry dedicated to strong professional standards.

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