Make the most out of your money!
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Things You Will Need
If you want to be informed when you start, please read this short guide which we have prepared for you.
Be aware of crooked insurance brokers who may advise you to move your policies even if they don't need replacing, just to get more money out of you. A change often does make sense, as term charges have dropped across the board in recent years. If you have a whole life or universal policy, be careful if you are considering cancelling them. Many such plans are locked in at good rates and carry heavy surrender charges.
Standard life insurance policies usually have lower premiums and larger face amounts than non-medical life insurance policies. For the first two years of a death-benefit policy, the payout is often limited to the return of accumulated premiums, sometimes including the interest accrued on those. These non-medical insurance policies are designed primarily for people with significant health issues.
An unwary customer can easily be lured into buying accidental death policies. While they may seem like a good idea when you are obtaining them, be aware that less than 3% of insurance claims are ever due to accidental death. When looking at the equivalent term policy benefits, most of the time the accidental death policy is actually more expensive.
Be careful when dealing with agents that are only allowed to sell their own companies' products. These are called captive agents and work for a single company - as opposed to brokers who are independent and can mediate deals with numerous providers. The first issue with these captive agents is that their plans usually have a higher premium than the independent agents - because the mediation fee must be included in the plan's price. Not being able to hunt around, captive agents almost never find the best policy to suit your needs and/or offer the best value.
Many of us look merely at the premiums payable on these plans and compare. What you have to remember is that the overall charges are always more relevant than the sole initial premium figure. Low initial premiums is a marketing ploy used by lots of insurance businesses all the time. If you are looking for short term insurance then the term plans which offer low initial premiums increasing with age can be a good bargain. All consumers are different and have different needs. Thus, plans that assume that all clients are alike are very much not in your best interest. It can take time to assess each customer and put together a policy tailored to their individual needs and circumstances.
Read the small-print in your policy agreement for any exclusions. One of the most widely incorporated caveats is the two-year suicide exclusion. But many policies also carry many travel or recreational activity exclusions if the client was engaged in these activities at the time of application. As these exclusions and guidelines are different depending on which organization you pick, make sure your broker has a look at many policies, is up to date with their specialties and so can provide you with a policy that suits you most.
Although insurance businesses can't doubt the information you put on your application after two years (standard incontestability period of Canadian life insurance products), it won't stop them pursuing you on criminal charges if you lie or avoid filling in the application properly. During this time, insurance businesses can contest a claim for misrepresentation or not admitting a material fact.
This wraps up our short listing.
Tips & Warnings
You should contact your broker before making any large insurance investments. Experienced professionals may be able to help you out and save you a lot of money.