Before deciding to buy any life insurance, it is better for the customers to know what the needs from buying the life insurance. Besides that, customers also have to choose the best types of policy for their need. There have three main needs to buying life insurance such short-term needs, long-term needs and business needs.
Firstly, do preliminary research on different types of policies and providers of life insurance. All policies are not same and some will give coverage for your lifetime and other will cover for specific number of years. Some policies also may offer other benefits while you still living and all depends based on the customer’s needs.
There have two basic types of life insurance, term insurance and cash value insurance. Term insurance generally has lower premiums in the early years but does not build up cash value that can be used in future. Besides that, it pays death benefit only if the customers die in that term and offers the largest insurance protection for your premium money. Customers will renew most term insurance policies for one or more term even if your health has changed. The premiums will tend to higher every time the term insurance had been renewed.
The cash value insurance is a type where the premiums charged are higher at the beginning than they would be for the same amount of term insurance. The part of the premiums that is not used for the cost of insurance is invested by the company and builds up a cash value that may be used in a variety of ways. After do research to the types of policies and providers in life insurances, customers will calculate how much life insurance that their need.
Life insurance can provide a one-off sum of money if the customers die during the plan term or are diagnosed with a terminal illness before the last 18 months of the plan and their life expectancy less than 12 months. Customers will decide how long to plan their life insurance. 2. Consult a broker and compare quotes.
After know the needs for life insurance, customers should make an enquiry with an insurance consultants speak to an to an insurance broker for assistance. Insurance consultant can be divided by two such a captive agent and independent agent. A captive agent (licensed with one carrier) can only offer the products that company sells. An independent agent knows about the policies and underwriting guidelines of many different companies also have their own-house underwriter who can discuss your situation with the agent and help customers get the best policy at the best rate with the right carrier.
A life insurance quote is the estimated cost of a life insurance policy based on information supplied by an applicant to an insurance company. To obtain a life insurance quote, an applicant is required to provide his/her age, gender and state whether they use tobacco. Mortality tables calculated by actuaries are used when calculating a life insurance quote. Health and family history are also commonly used in conjunction with these tables when processing a life insurance quote. It is standard practice for a life insurance quote to include written terms and conditions, for which a life insurance contract will be provided.
After deciding to apply life insurance, the customers need to complete an application to purchase life insurance. The application will ask for basic information, such as your name, address and many more. The picture 1.0 shows the example of the application form for life insurance.
For the personal information, the insurer will ask questions such: * Weight.
* Date of birth
* Lifestyle habits ( drinking, smoking, exercise)
* Financial information including the annual income and net worth
It is very important to tell the truth while fulfilled the application because if the insurances company discovers that the customers lied about health condition lifestyle, it can increase the customer’s premium or cancel the policy and also will deny a beneficiary’s claim to the death benefit.
Nowadays, most companies requires an in-person medical exam and the life insurance agents will arrange for a paramedical to meet the customers at home, office or a clinic selected by the insurance company. During the exam, the paramedical will likely: * Take medical history.
* Ask about immediate family’s medical history.
* Take blood pressure.
* Check weight and height .
* Get a urine sample.
* Ask about lifestyle habits that could affect the customers.
4. Finalise customer’s application
After evaluate and analyse your information, the gaps identified will form the basis which the life insurance agents will use to explore the possible solutions for you to meet your objectives. Some of the life insurances agents will give you a proper financial analysis report that contains all information that you provided in the fact-find form and analysis your financial situation.
The life insurance agents will present to the customers in a logical manner based on the information that customers have provided and immediately give recommendations. Ensure the customers have a clear understanding of the policy’s term and conditions before sign up the life insurance application. 5. Underwriting and approval of policy.
When the insurance company gets the customers information, they will send it to an insurance underwriter who will evaluate the customers health and health history and lifestyle to determine whether they will offer insurance, and if so , what rate they will give. Obviously, the insurance underwriting is the most important part of the customers getting a good rate on life insurance. Different insurance companies have different underwriting guidelines. These different guidelines can have a big effect on how you will be rated. Only an independent insurance agent can guide your application to the company which will likely give the customers the best rate. 6. Review customer’s policy.
A life insurance agent who is committed to his work and his clients will conscientiously keep in touch with the customers conduct a review of the customer’s policies and to monitor changes in financial circumstance. There is no hard and fast rule, but a norm would be to conduct a review annually. Should there be changes to the customer’s financial circumstance. The customers should also take the initiate the update of the life insurance agents. 10.2 How to claim Life Insurance.
Claim settlement is one of the most important services that an insurance company can provide to its customers. Insurance companies have an obligation to settle claims promptly. The customers will need to fill a claim form and contact the financial advisor and submit all relevant documents such as original death certificate and policy bond to the insurer to support the customer’s claim. Most claims are settled by issuing a cheque within 7 days from the time they receive the documents. However, if the insurer is unable to deal with all or any part of the customer’s claim, customers will be notified in writing.
There have two types of claims such maturity claim and death claim. Maturity claim is the claim that based on the date of maturity life insured is required to send maturity claim and original policy bond well before maturity date to enable timely. For the death claim, it need to claim money to pay for funeral costs, payoff the deceased’s and help the family meet monthly expenses now that the deceased’s salary is no longer there to pay the bills.
Forth, discuss with the insurance company about the settlement so that you will understand the payout. Some life insurance settlements pay out over a long period of time, while others pay our in a lump sum. Lastly, when all of the accommodations have been arranged and there is a payout agreement, submit all the forms along with the death certificate to the life insurance company in order to claim the life insurance settlement. In general the payout period should be short as they understand that the money needs.