Brini’s Tips For Finding The Best Whole Life Insurance Provider
Today was one of those days wherein I had to choose between staying in cozy socks or going all out with my new boots. Decisions, decisions, right? This started me thinking that with life insurance, it should be as easy to choose the right provider as picking socks (kind of). Now, let us get into how you can choose a provider that fits like your favorite slippers.
Having tried to obtain life insurance, and then worked with different private practices in order to get the best deal, I can assure you that selecting the correct whole life insurance company is no easy choice. This is one of my biggest financial decisions, so I want to make sure that I nail it. Whole life insurance is not only a death benefit that you leave to your loved ones, but it is also an investment for the long term involving cash value.
Like I was a few years ago, you might be asking yourself how to even get started searching for and purchasing a whole life policy. When the vastness of the industry itself leaves you with many uncertain options. Here are some tips I have learned that will help you find the best whole life insurance provider for you that I am going to walk through in this article. These highlights should help you in your decision-making process, be it first-time buyers or switching providers.
Why Whole Life Insurance?
I was an early whole life insurance research devotee because it has lifetime coverage, and you build cash value! Whole life insurance covers you for your entire life, as long as you keep paying premiums, in contrast to term life insurance which only covers a short timeframe. On top of that, it accumulates over time and can be used down the road with loans or withdrawals once you melt cash valeur.
I also appreciated that whole life insurance has fixed premiums for life, as opposed to other types of life insurance where the premiums can rise based on your age. However, as with most things in life, getting this type of product from the right provider is not merely a case of taking the cheapest offer. That takes time, researching, and considering permanent financial objectives.
How To Find The Best Whole Life Insurance Company?
My Tips:
Look For Financial Stability
When searching for the right whole life insurance company, financial stability was my top priority. You also do not want to pick a provider that will go bankrupt down the road which will result in your family having no coverage. Be sure to verify the companies’ financial strength ratings from independent agencies such as AM I Best, Fitch, and Standard & Poor’s. These ratings provided me peace of mind that the provider I selected would be able to pay claims in the long run.
Get Multiple Quotes
Premiums for whole life insurance were very different across providers and that was something I gleaned very early on. So I contacted a handful of different providers to get quotes and compare not only the prices for the premiums but also their cash value growth potential. Forget the lowest price go for the value you are receiving for your money. You desire a policy that will provide you with firm cash value growth throughout the years, and many times higher premiums equal better growth rates.
Review The Claims Process
Finally, I examined the provider’s specific sample claims process. It was something I wanted to avoid thinking about, but it helps to know how easily your beneficiaries can claim and receive the death benefit when you die. I also found it useful to search for claims satisfaction ratings and reviews from those who had made claims with the insurer. That’s what I used to gauge how well a company stands behind families during tough times.
One of the most important features of a whole life policy that I didn’t understand when I began looking at whole life insurance is how the cash value works. The lifetime cash value accumulates tax-deferred, and once the policy owner finds himself with a permanent policy he can access it via loans or withdrawals. What I didn’t realize at first is each provider has varying interest rates and cash value growth strategies. While some provide growth in between a guaranteed minimum, others may give overall better growth due to dividends or reinvestment options. Cash value was one of the key deciding factors for me, as I wanted to clearly understand how my provider makes money.
Dividends are another attractive characteristic of a policy and can help boost your policy’s growth. A number of whole life insurance carriers have a track record of paying annual dividends, which are typically distributed to policyholders and can provide one or more options for utilization: receive the dividends in cash, apply them toward premium payment, or reinvest them to increase the net cash value of your policy. Dividends are not assured, however among the best lengthy-time period plans is to search for a supplier with a sturdy musical document for paying them.
One of the things I evaluated when looking for a provider was riders; these are extra features that can make your policy more flexible. Riders can also be simple covering options for critical illness or accidental death, but may also include more complex choices such as long-term care coverage, and disability riders. Option to customize your policy was important for me to have the option of customizing my policy according to my specific needs, so I took care that the provider I chose was offering a wide variety of riders.
Another reason I went with the provider was their reputation for customer service. The long wait times, unhelpful representatives, and if I had to change my policy or make a claim it was going to be difficult you just did not need that stress. I searched a lot, read reviews from other customers, and spoke with friends/colleagues who had also been with the providers I was looking at. I wanted a company that was perceived as stable and pleasant to deal with, especially when it came to administering the policy.
Frequently Asked Questions
How Does Whole Life Insurance Work?
You pay a fixed premium, part of which goes toward the death benefit and part builds cash value. Cash value increases at a guaranteed rate with the option of borrowing or taking cash withdrawals.
Is Whole Life Insurance Expensive?
It is true that the costs of whole life insurance are typically higher than term life insurance. But, in return for its commitment to provide coverage until your death and cash value build-up, it may be more beneficial over the long haul.
Can I Borrow Against My Whole Life Insurance?
You are even able to take out loans versus the cash worth of your policy (unpaid loans will minimize any death benefit).
Are Premiums For Whole Life Insurance Fixed?
Whole life insurance covers you for as long as you live, meaning your premiums will never go up over time, ensuring predictable terms over the years.
Can I Cancel My Whole Life Insurance Policy?
You can cancel your policy anytime you choose, although be aware if canceled early you might lose all or part of the cash value in-premium.
Conclusion
Ultimately, it became a trade-off of cost, growth of the cash value, and my service expectations for my whole life insurance provider. Though it took a little time, and research, I ended up finding a provider with a competitive premium and solid actuarial/financial backing that also provides great customer support.
I also ensured that my provider had a background of paying dividends and provided flexibility concerning policy riders, as this would assist me in customizing my policy to fit my future needs. Instead, I chose to thoroughly evaluate each provider and then by doing so could pick a policy that offered slow-burning long-term value protection for the family as well as a decent investment that grew over time.
If you’re in the market for whole life insurance, my advice is to take your time, shop around for quotes, understand your financial priorities, and select a provider that provides high financial strength ratings and quality service and can be flexible as both you and the world change over time. This is a huge decision, but with the right information, you can get the provider that will offer the coverage and peace of mind that you are looking for.
