Not all life insurance agents are trusted advisors. So, the simplest way to prevent being exploited is to seek for an independent agent that will save you time and money. Here are the other secrets that your Life Insurance Agent may be keeping from you…
1. THEIR INCOME IS BASED ON COMMISSION
The agent’s income is solely compensated from the commission. It is one of the possibilities for the agent to have a personal interest that leads to you buying the highest premium possible equating to their highest commission possible. Thus, it may change his/her perspective of things, as well as the type of products clients are introduced to.
2. CASH VALUE WILL NOT BENEFIT YOU RIGHT AWAY
Yes! Cash value will build-up. But it takes about five years to have the cash value equal to the amount you paid for the whole life insurance.
3. BUY TERM AND INVEST THE DIFFERENCE
The term insurance is significantly less expensive than the whole insurance. This is why you can buy term then invest the difference on mutual funds. In fact, the combination of term and your investment for mutual funds may be less costly that the whole life insurance.
4. YOU MAY NOT NEED CHILD LIFE INSURANCE AFTER ALL
Renowned experts namely: Dave Ramsay, Suze Orman, and Neal Frankle are on a arguing against buying life insurance for kids.
“The only reason you need life insurance is if anyone is dependent on your income…please, you new parents, do not let anyone talk you into buying a life insurance policy on your child.” said Suze Orman.
Image Credits: State Farm via Flickr
According to them, if your child is not at the risk of a serious illness and you are financially stable to cover foreseen medical bills then, you are better off without it. Instead, save up for your child’s education until tertiary level.