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Top 5 crucial questions you must ask your agent before buying life insurance

The insurance market is flooded with hundreds of insurance companies and their numerous products. For most of us, buying a policy is a rather daunting task. As a result, we end up depending on agents who guide and assist us in deciding which policy is suitable for our needs without knowing for sure if what they are suggesting is the right choice for us. Asking the right questions can really speed up your decision-making process. We'll discuss the 5 main questions that you need to ask your agent before purchasing a life policy:

1. Inquire about the agent and the company

Make sure that your agent is licensed to sell insurance products in your state and that he is employed by the insurance company to sell those products. Check with your state insurance department to be certain that the company and agent are licensed in your state. You must be aware that many insurance agents offer a wide range of investment/insurance products other than standard life insurance and may represent more than one insurance company. Your agent must understand all the products of one or more insurance companies he is representing and how they can influence your needs. In addition, the insurance company that you intend to purchase life insurance from must be trustworthy, reputable and financially stable.

2. How much insurance is needed?

Sometimes it is difficult to calculate how much life insurance is needed to protect the well-being of your family as it can be bought for various purposes such as paying off after-death expenses or providing monthly income to children or a spouse. Sit down with your agent and discuss with him/her your financial status and family circumstances to determine the amount of life insurance that you must buy.

3. Types of life insurance policies

There are several types of life insurance policies available in the market such as term life insurance, whole life, universal life and variable universal life insurance. Making a decision as to which policy is right for you can be quite confusing. Therefore, you must ask your agent about these different life insurance policies, understand the purpose, premiums and benefits associated with these policies and, ultimately, go for the one best-suited to your situation.

4. Is your policy convertible?

Talk to your life insurance agent about whether the policy that you intend to buy contains a conversion clause. Basically, the conversion clause allows you to convert your renewable insurance policy into another type of policy without showing the proof of insurability. Ask your agent up to what age is your policy convertible and ask about the benefits and premiums when you convert to another policy.

5. How to make a claim?

Lastly, ask your agent how to make a claim on the policy. Usually, it is written in your policy whom to contact and under what timeline you’re required to make a claim. However, get your agent to tell you about the claim making procedure in detail and in what time frame will the insurance company respond to your claim.

Other than the above five questions, there are many questions that you may want to ask. Remember, the objective of a life insurance agent is to help you buy a policy that benefits and provide the right coverage for your specific needs.