What You Should Know About Life Insurance:
Final Tips & Red Flags

More tips to keep in mind about an intelligent, informed life insurance purchase:

Take your time. On the other hand, don't put off an important decision that would protect your family.

Don't rush into a decision just because you are feeling pressured. In fact, pressure from any sales person is generally a bad sign.

Make sure you fully understand any policy you are considering and that you are comfortable with the company, agent and product.

When you purchase a policy, make your check payable to the insurance company, not to the agent. Be sure to get a receipt.

After you purchase an insurance policy, you may have a "cooling-off" period during which you can change your mind. During that period, read your policy carefully. If you decide not to keep the policy, the company will cancel the policy and give you an appropriate refund. Ask your agent.

Review the copy of your application contained in your policy. Promptly contact your agent or insurance company about any errors or missing information.

If an agent or company contacts you and wants you to cancel your current policy to buy a new one, contact your original agent or company before making any decisions. Surrendering your policy to buy another could be very costly to you.

If you have a complaint about your insurance agent or company, contact the customer service division of your insurance company.

If you still are dissatisfied, contact your state's insurance commission. Most have a consumer affairs division that can offer help.

Review your policy periodically, or when your situation changes to be sure your coverage is adequate.

Life Insurance Red Flags

  • Be wary of life insurance products that are sold as, or with, savings or investment products
  • If in doubt, ask if it is life insurance
  • Agents selling without a valid license from your state's insurance department
  • Pressure to rush through the application process, to complete an allotment form, or to authorize withdrawal of funds from your bank account for the purchase of a life insurance policy
  • Delays in receiving a copy of the contract
Additional red flags for military personnel:
  • Agents selling on the base without authorization from your base solicitations officer or the Department of Defense
  • Non-military, ex-military personnel or former military personnel acting as investment or financial advisors in a group or classroom setting

Additional Life Insurance Resources

Your personal insurance agent and company are good sources of general information about insurance.

The National Insurance Consumer Helpline (NICH) is a toll-free consumer information telephone service sponsored by insurance industry trade associations. The toll-free number is 1-800-942-4242.

Your local library is an excellent, free resource of books and magazines about insurance and personal finance.

The consumer affairs division of your state insurance department can provide useful information. Some departments have toll-free numbers and web sites to respond to consumer questions.

Final Thoughts About Buying Life Insurance

Good luck and I hope my tips about buying life insurance help you. An informed buyer is a better buyer. Thanks for reading.