similar policies from different companies to find which one is likely to give
you the best value for your money. A
simple comparison of the premiums is
not enough. There are other things to
consider. For example:
• Do premiums or benefits vary from
year to year?
• How fast does the cash value account accumulate?
• What part of the premiums or benefits is not guaranteed?
• What is the effect of interest on
money paid and received at different times on policy? Remember
that no one company offers the
lowest cost at all ages for all kinds
and amounts of insurance.
• How quickly does the cash value
grow? Some policies have low cash
values in the early years that build
quickly later on. Other policies have
a more level cash value build-up. A
year-by-year display of values and
benefits can be very helpful (the
agent or company will give you a
policy summary or an illustration
that will show benefits and premiums for selected years).
• Are there special policy features
that particularly suit your needs?
• How are nonguaranteed values
calculated? For example, interest
rates are important in determining
policy returns. In some companies,
increases reflect the average interest earnings on all that company’s
policies regardless of when they
are issued. In others, the return for
policies issued in a recent year, or a
group of years, reflects the interest
earnings on that group of policies;
in this case, amounts paid are likely
to change more rapidly when interest rates change.
Important things to consider
• Review your own insurance needs
and circumstances. Choose the
kind of policy that has benefits
that most closely fit your needs.
Ask an agent or company to help
• Be sure that you can handle premi-
um payments. Can you afford the
initial premium? If the premium
increases later and you still need
insurance, can you still afford it?
• Don’t sign an insurance application
until you review it carefully to be
sure all the answers are complete
• Don’t buy life insurance unless
you intend to stick with your plan.
It may be very costly if you quit
during the early years of the policy.
• Don’t drop one policy and buy
another without a thorough study
of the new policy and the one you
have now. Replacing your insurance
may be costly.
• Read your policy carefully. Ask your
agent or company about anything
that is not clear to you.
• Review your life insurance program
with your agent or company every
few years to keep up with changes
in your income and your needs.
To summarize, if it is important to
you to protect your family’s lifestyle,
protect your business interest, or
conserve your estate, this can all be
accomplished with the proper life
insurance policy. We recommend
using a life insurance professional to
help you with the process of selecting the policy type and amount that
best suits your needs. With proper
planning and sound advice from your
life insurance broker you’ll be able
to prepare for the unexpected, which
unfortunately is a part of life. n