What Is the Price of Business Insurance?
Many people consider cost the primary reason for choosing one insurance policy over another. There are however additional and by no means less important factors. Among them are some questions to consider.
How strong is the insurance company?
In today’s financial climate the quality of your insurance company takes on new meaning. Those carriers in danger from poor investment results or real estate loans may well be taken over by stronger carriers. While this generally means the new owner will abide by the guarantees of the original policy it can depend on the individual case. When this happens it severely restricts your future options.
What options do I have?
Most insurance companies offer both term and permanent life insurance, and most carriers will allow the owner of the policy to convert term coverage into a permanent policy within a specific time period. Although most will allow conversion into many of the competitive products they currently offer, those carriers taken over by others can find they options limited to older cash value policies that may not meet you new objective.
Why is convertibility so important?
Typically, our health declines with age. We may generally not be in the same shape we were at a younger age. However, once you have a term policy in force, you have “locked in” your health category with regard to convertibility. Your options may be severely restricted.
Why do premiums vary so much?
This could have more to do with the insurance company than it does with you. Assuming the same health category, you may find premiums differ a lot. While logic may tell you the stronger the carrier, the higher the premium, just the opposite can be true. Today, stronger insurers are using their clout to increase market share. Premiums can also depend on the investment yield the company has experienced, their average bond maturity, mortality experience and other factors. These are all good reasons to shop before you buy.