One of the important things to consider is whether the company you are buying from is underwriting conservatively and collecting the appropriate amount of premium.  As a customer you want to work with a company that collects enough premium and doesn’t accept to many risky applicants.   The basis of a life insurance company is the ability to pay out a benefit to you and your family.   If they are not collecting enough premium now, will they have enough money down the road to pay the benefit.

We try and work with our clients to not only determine the length of the policy, but also the strength of the company and the companies evaluation process.   Also, certain companies will underwrite for certain conditions more favorably and establish a niche with those types of candidates.  For example, if you are a smoker than often times Prudential will be the best company for you to go with as they seem to underwrite favorably for that.

Make sure to consider if the company you are going to apply for is asking for enough premium.   Typically they are, but don’t always assume the lowest price is the best way to go.   Make sure you are looking at companies with at least an A rating.

When buying term life insurance there are several things to consider.  For example, what length level term do you want to buy.  They offer 1 year annual renewable term, 5 year term, 10 year term, 15 year term, 20 year term, and even 30 year term.  On top of that, many of the company’s offer a return of premium option.  This option will return all of your premiums to you, if you outlive the term.    I recommend to our clients that they have the term run at least through the years of highest need for their families.   In other words, until there kids are at least 18 and preferably through college.

The term length is important, because at the end of the term the insurance cost will probably go through the ceiling and  be cost prohibitive.  Another thing to keep your eye on with insurance is your insurance age.  Most life insurance companies, recognize you as one year older when you get within six months of your birthday.  For example, if you are turning 43 on July 11th, you want the policy to be dated no later than January 10th to be considered 42.  The other option to save your age is backdating the policy.   This can be a good option, but you must catch up on the back premiums.   Talk to your agent about this.

Make sure to put your policy in a safe place.  It is a shame, but many life insurance policies go unclaimed.  Either the policyholder lost the policy or never let his/her family know that he had a policy.   Of course the insurance company is ok if the beneficiary doesn’t come forward.  That simply means that they don’t have to pay out the benefit.  They will not seek you out.  This is a good reason to have an agent that services your account and advises you on your insurance needs. 

When looking for a policy look at the financial ratings of the companies.  Make sure the company you buy from has at least an A rating.  It is easy to get caught up on just the rate and ignore the strength of the company.  With today’s financial insecurity, make sure you consider this in your decision.

The rating that a life insurance company has is very important and something that should be paid close attention to when buying insurance.   It is always tempting to automatically go for the policy that is the cheapest to save money, but the ratings are based on the company’s ability to pay the claim.  With insurance the ability to pay is the most important thing.

When looking for life insurance, I usually suggest looking at company’s with a rating of at least an A from rating services such as  Standard and Poors and AM Best.  Another way to look at it is like renting your house to a new tenant.  You certainly want to look at their past history as well as their ability to pay.

When selecting your new policy or examining the existing one you have, make sure the company has a strong rating.