Life Insurance Selection Process
If you feel like you need more help selecting the right insurance policy, we have created the Life Insurance Selection Process to guide you.
The steps to the process are:
- Gather your financial and insurance data into one place.
- Meet with your financial planner.
- Meet with your accountant.
- Meet with your attorney.
- Meet with a certified life insurance agent.
- Review your findings with a trusted family member or friend.
- Follow up and make a decision with confidence.
Now that the process has been outlined, let’s dive into how each step will work.
1. Gather your financial and insurance data into one place.
It’s hard to get somewhere when you don’t know where you’re starting from. It sounds like no-brainer, but sadly this is where most people fall short and give up.
Every situation is different because everyone has different family, career, entertainment, and financial goals. A life insurance plan should be in harmony with those goals, not in conflict with those goals.
Though it may be laborious, gather all your current financial and insurance information into one place, whether it be a box, physical folder, or a folder on a computer. You’ll want to be armed with this information when you meet with your professional advisors.
2. Meet with your financial planner.
You may have been thrown off guard when we said you would be meeting with your professional advisors. Don’t be. Professional advisors exist to save you money and headache. They should save you more money than they charge or else you should find new ones.
The purpose of meeting with a financial planner is to know how you are spending your money and how much you would be able to allocate to an insurance policy.
What if I don’t have a financial planner? You can search for them online, ask friends and family, or ask other professionals, such as bankers and lawyers, for recommendations. Preliminarily choose a financial planner and call his/her office. Ask how many clients the company cares for. Ask how long the company has been in business. This may seem intrusive but don’t worry. Due diligence is the most important part of the process. A good professional adviser will not be ashamed of his/her reputation. If you get negative feedback from the first meeting with the planner, choose a new financial planner and repeat the process. Trust your instincts.
In your meeting, share with your financial planner all your life goals and current financial and insurance information. State that you are thinking about getting life insurance. Ask your planner what he/she would recommend for your situation. Take detailed notes. Thank your planner for the advice and say that you will also be meeting with your accountant, attorney, and life insurance agent. If you don’t have an accountant, attorney, or life insurance agent, ask your financial planner for a good reference.
3. Meet with your accountant.
The purpose of meeting with your accountant is to discuss how a life insurance policy would affect your tax situation.
If you don’t have an accountant you trust, follow the same process as outlined for finding a certified financial planner. Meet with your accountant. Share with him/her your life goals and financial and insurance information. Ask what life insurance product would best fit your tax strategy. Then, state the life insurance policy your financial planner recommended and discuss it will your accountant. Take notes. Thank your accountant for his/her time, and state that you will also be meeting with your attorney and life insurance agent. It is important for your professional advisers to know that you are an informed client who will do the proper research. When your advisers know this about you, they will treat you with great respect and be very helpful to you.
4. Meet with your attorney.
Don’t be afraid of attorneys. You might want to meet with a lawyer who specializes in estate planning when looking into life insurance. You want to be aware of estate laws that might affect the benefits of a life insurance policy.
State that you have previously met with your financial planner and accountant and that you have come to talk about estate planning strategies. Take notes. Discuss how various term and whole life policies would affect the insured’s estate. If you are the insured, ask what advantages or disadvantages your heirs might encounter if you were to pass on. If the policy would insure another person, ask what advantages or disadvantages the beneficiaries might encounter if that person were to pass on. Thank the attorney for his/her time and state that you will be meeting with a life insurance agent and get back to him/her if you have further questions.
5. Meet with a certified life insurance agent.
If you don’t have a life insurance agent, follow the process of obtaining referrals as described above. Again, ask how long the agent has had a license and been in the business.
Tell the agent that you’ve met with your financial advisor, accountant, and estate attorney. Share with your life insurance agent your goals and current financial and insurance information. Ask which life insurance policy the agent would recommend and why. Take notes as always. Ask for the advantages and disadvantages to every policy that is discussed. Ask which riders and other options would be best for your situation. Ask the agent for quotes of a few policies so that you may review them later.
Thank the agent for his/her time and say that you’ll get back to him/her any more questions you might have.
6. Review your findings with a trusted family member or friend.
Review your notes when you get home so that you can better understand what was said in your meetings. Take your time. Later, review your notes with your spouse or someone you can trust. It always helps to have another person there to point out things you might not have noticed.
7. Follow up and make a decision with confidence.
If you have any concerns or questions, follow up with your professional advisers to resolve them. They will be happy to help you if you treat them in a courteous manner.
With all your questions resolved you can then make a “go”/”no go” decision. It may not be the right time to buy life insurance. Only you will know because only you will have done the research for your unique situation.
If you decide you do want to purchase a policy, the next decision is which one and how much. Do something you can live with. Don’t make any impulse decisions, and don’t get into something you won’t be able to pay for later. When you decide, be happy and confident that you did the right thing. You just put in more effort than 99% of the people that buy life insurance.
February 2nd, 2008 at 6:28 pm
[…] One of the biggest pieces of advice we can give is to get many quotes for senior life insurance. Compare death benefits, premiums, and riders for various products. If you feel you need additional advice, you may consult with a financial planner, accountant, estate attorney, and life insurance agent as described in our Life Insurance Selection Process. […]
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