Cheap Life Insurance Q&A Part 1

I recently started a home based Internet business and now that things are going well I would like to buy a life insurance policy. Where can I find a good life insurance quote site that is unbiased or gives me quotes from a wide array of services? Also, are there any good tips for saving money buying life insurance for small business owners?

As a life insurance agent who deals with insurance day in and day out I appreciate your frustrations from looking at thousands of insurance sites. The following are five of the most common mistakes consumers make when buying life insurance.

1. Selecting term life insurance solely because it's cheap.

Shopping for cheap life insurance by just comparing premiums is asking for trouble. You should compare company ratings to determine financial strength and policy features, such as convertibility options. While the policy’s premium is certainly a factor, ensuring that your policy matches your financial goals is more important.

2. Not understanding that term life insurance is temporary.

That's why it's called "term" insurance -- because you buy it for a set period of time, most commonly 20 years. This is fine for a temporary need, such as insuring yourself until your mortgage is paid off or funding your children’s college expenses in the event of your premature death.

A 20-year level-term life insurance policy you bought when you were 30 would expire when you're only 50. At that point, you still might need to carry insurance, but your age and health conditions might make it impossible or very expensive to do so. At least, if your policy has a convertibility option you can get coverage, it just might be down right unaffordable.

3. Buying from a less-than-stable insurance company is not the way to purchase cheap life insurance.

Don’t be afraid to ask about an insurance company’s ratings. You can also look for an insurer’s Standard & Poor's, Moody's or A.M. Best ratings on the Internet.

There are many insurance carriers with high financial ratings (A+ or better) so you shouldn’t have to buy insurance from a lower rated company. But, keep in mind that ratings can and will change, so ratings alone shouldn’t be your only consideration.

4. Buying cheap life insurance coverage based on a set formula.

You may have heard that a good rule of thumb is to buy cheap life insurance coverage equal to 10 times your annual salary or 10 times your beneficiary's annual financial need. The idea is that if your surviving beneficiary invests the life insurance proceeds in the stock market (getting an average 10 percent annual return), they'll have a steady income stream and never need to tap the investment principal.

While this formula isn't a bad place to start, everyone has different needs, so don’t assume that 10 times your salary is what you need to carry in life insurance. The best advice here is to sit down with a knowledgeable agent that will take the time to learn about your needs.

5. Failing to regularly review your policy.

Is your former spouse still the beneficiary of your life insurance policy? Did you buy term insurance to cover you while you pay off your mortgage? If you refinanced during the latest rate drop and restarted the clock on your loan, you might also need to update your insurance term. Life definitely has a way of throwing changes your way. Just make sure your life insurance changes along with you.

Also when shopping on the Internet for insurance be careful of sites that are there purely as lead generators because these sites just sell your information. But, there are plenty of legitimate and trustful site on the Internet than one can purchase insurance.

You can tell the good from the bad when looking for cheap life insurance by taking these steps.

1. Do not put information in a form unless you actually get a real quote.

2. look for site that have a phone number with real agents that answer the phone.

3. If the site says get quotes from multiple agents then the site is selling your information as a lead service.

I want a cheap life insurance policy, should I use an agent?

As an agent for Aflac, I can tell you that there are so many different types of cheap life insurance policies that it is a good idea to work with a professional to help determine your needs. If it is a short term need then a term policy that doesn't build any cash value can be a good fit. If this is to be used for retirement proposed and you want it to pay out no matter what happens then you would want a permanent policy. Working with a trusted agent with experience is a good way to help determine an amount and what type best fits your needs.

You should know that an agent, though, represents the insurance company and does not represent you. This does not mean agents can't be trusted because great agents know that what's best for the company is what's best for the customer. But definitely be sure to check out the agent's and the insurance company's reputation.

While you will generally have to work with an agent once you choose an insurance company, you could also consider working with an insurance broker until you pick a company. The benefit to having an insurance broker is that the broker legally represents you, the consumer, rather than the insurance company. However, as with any insurance agent or insurance company, be sure to check their reputation.

What company provides cheap life insurance?

There are many companies that provide cheap life insurance. However, you really should not choose your insurance based solely upon price. If you choose a company based solely on price, you're making a huge mistake. After all, what good is an insurance policy if the company doesn't pay you when they're supposed to or messes up your payments?

As an Aflac agent, I can tell you that we have a AA rating by both Standard & Poor's and AM Best so you can rest assured that you will be treated as the valued client that you are. A complimentary financial need analysis will be given to you for free when you talk to one of their agents.

Aflac also offers an extremely easy application process. All you have to do is answer a few questions and we'll tell you what your rate and coverage will be. No health examinations or anything else.

When you say "cheap", you wish to pay the lowest amount of premiums for the greatest amount of coverage you can afford. There are several different years available for Term insurance. Here is my recommendation if you live between these age groups:

Under 40 years old, you should get 35 Year Term (if offered in your state, if not, get 30 year term)

Between 40-55, you should get 20 Year Term

Between 55-60, you should get 15 Year Term

Age 60 and above, get 10 Year Term

Cheap Life Insurance Q&A Part 2

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